Investing in the real economy and supporting local businesses: this is an ambitious program, accessible to savers wishing to invest their savings in the capital of French SMEs. Several arguments make this investment attractive.
First of all, it is encouraged by the state through a tax benefit. This device, called the “Madelin law income reduction”, allows taxpayers who subscribe to the capital of certain companies to benefit from a reduction in their income tax equal to 25% of the sums invested (for payments made since the 9th. May and until the end of the year). In return, you must commit to keeping your shares for at least five years.
Another attraction of this investment: the performance potential. According to the professional association France Invest, investment in unlisted companies is the most profitable investment over a long period. Thus, over the last fifteen years, the annual performance of private equity has stood at 11.7% on average, against 5.4% for the index of large listed stocks, the CAC 40.
For an individual, however, it remains complex to invest directly in the capital of SMEs. You have to be able to identify the nuggets of tomorrow, ensure that the identified company is indeed eligible for the tax reduction system and have substantial sums of money.
To play the apprentice “business angels” without leaving his shirt there, one solution is to turn to funds managed by professionals, such as local investment funds (FIP) and mutual funds in innovation ( FCPI).
Constraints
Be careful, however, the results of these products are far from those put forward by France Invest: first of all because they must respect investment constraints; secondly, because their costs are particularly high. The average annual fee rate is therefore between 3.50% and 4% per year!
To generate performance beyond the tax advantage, it is therefore necessary to make the right choices among the dozens of funds open for marketing each year.
To begin with, you have to select reputable management companies that have been active in this sector for many years. “The most serious players systematically work with institutional investors in parallel”, says Jean-David Haas, co-founder and CEO of the management company Nextstage. With this manager, tax funds represent less than 25% of fundraising. “We must be efficient, by focusing in particular on diversification, it is a question of image and reputation for all of our activity”, continues Jean-David Haas.
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