Non-listed, also called “private equity”, continues to spread in unit-linked life insurance contracts. According to France Invest, it drained in 2021, through the life insurance channel, nearly 4.8 billion euros, i.e. almost three times more than in 2020. For the record, this investment consists of buying units of a fund made up of participations (in the form of shares) in the capital of companies not listed on the stock exchange (start-ups, ETIs, SMEs). There are also variants: some funds specialize in infrastructure (bridges, wind farms) and others in private debt through the holding of bonds.
The private equity boom in life insurance was made possible by the Pacte law of 2019. “This regulation removed the cap on the share of this asset in a life insurance contract which until then was limited to 10%”, recalls Dominique Collot, Marketing Director of Suravenir.
Subsequently, this investment in the real economy was democratized thanks to two “general public” fundraisers by BPI France as part of the Recovery plan. According to the Good Value for Money site, around fifteen risk mutual funds (FCPR, the legal shell in which private equity funds are housed) are currently referenced by around ten insurance companies.
Supporting a business in its growth
“There are two categories: ‘closed’ funds, whose subscription window is limited in time with an outcome after ten years, and ‘perpetual’ funds, with a lifespan of ninety-nine or a hundred years, permanently open”, says Cyrille Chartier-Kastler, founder of this site. Why opt for private equity? “This investment has the advantage of being decorrelated from the financial markets. Plus, it’s likely to serve up double-digit performance,” says Guillaume Lucchini, founding president of Scala Patrimoine. France Invest indicates that, over the period 2007-2021, the non-listed posted an average return of 12.2% per year, against 6.3% for real estate and 5.1% for the stock market. In addition, slipping an unlisted share into units of account allows you to benefit from the privileged taxation of life insurance.
Initially, private equity carried out directly is not a liquid investment, because it is a firm commitment to hold unlisted shares of a company over a long period in order to support it in its growth. “However, in the context of life insurance, this liquidity is partly provided by the insurer”, says Valentin Pillet, head of private equity at Neuflize OBC. In the event of early resale of the shares, the individual is reimbursed in cash and/or securities. However, this policy varies according to the companies with sometimes additional costs.
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