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How to invest in a FCPR?

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The investment process

This diversification tool offers individual investors a unique opportunity to invest in units normally reserved for institutional investors.

All management companies divide their Fonds Commun de Placement à Risque (FCPR) into several categories of units, which means they can apply degressive fees.

Once your advisor has validated with you your ability to assume the risk, and explained every advantage and disadvantage of the system, he or she will open the door to the share category corresponding to your investment.

Minimum amounts

Each management company has its own share categories:

  • The C share, capitalizing and accessible from €1,000

  • The E share, capitalizing and accessible from €200,000

  • The I share, capitalizing and accessible from €500,000

  • The M share, capitalizing and reserved for marketing by intermediaries

  • The AV share, capitalizing and reserved for eligible counterparties

Steps to follow to select a suitable FCPR fund

At every stage of your investments, we recommend that you work with a professional certified by the AMF and regulated by the ORIAS.

While we believe that FCPRs are a fantastic way to generate capital gains, the fact remains that not all FCPRs are equal on the French market.

Our market study was based on the following criteria:

  1. A convertible bond FCPR Which offers a better risk/return ratio than a 100% equity FCPR.

  2. A management company with a guarantee Example for Entrepreneur Invest: The fund is bound by a guarantee agreement with the European Investment Fund. Its purpose is to provide a partial guarantee for investments in simple or convertible bonds made by the Fund in European SMEs. The partial protection granted by the EIF will cover 50% to 70% of the capital of investments eligible for this protection. This will be done in return for the payment of an annual fee that will reduce the Fund's potential performance (from 0.25% to 0.5%). On an ancillary basis, the Fund may use a guarantee entered into with BPIFRANCE FINANCEMENT. This protection would cover 50% to 70% of the capital of eligible investments, up to the allocated ceiling and 30% of the amount of the insured risk.

  3. Risk management An independent analysis is carried out externally (e.g. ESMA-approved rating agency Inbonis). The rating must be favorable for the Fund to invest in the bond concerned. Where tangible, liquid assets exist (premises, goodwill, operating rights, etc.), Entrepreneur Invest will make every effort to negotiate guarantees. There is no guarantee that these protections can be implemented on all investments.

With this in mind, we have selected the best FCPRs in the marketplace. Our investors can therefore diversify their assets and dilute their risk with peace of mind.

If you'd like to understand the taxation and management of FCPRs, follow the steps to managing an FCPR. Stay tuned for our next article in the FCPR series to deepen your knowledge and consider how you can help support young innovative companies. #Investment #Innovation #FCPR

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