The fund then enters an investment period. The management company then searches for companies in which it wishes to invest and selects them after in-depth analyzes. The capital you have invested in the fund is used to acquire stakes in these companies. Once the entire fund is invested, the management company monitors the investments for the FCPR. A visit to https://www.evergreenwealthformula.com/new/ will do you a great good.
Depending on the funds and the strategy chosen, there may be a pre-liquidation period during which the management company begins to sell the participations and possibly makes early distributions to investors.
When the FCPR has reached the end of its lifespan or all the holdings have been liquidated, the management company decides on the liquidation of the fund. If any remainder, the last holdings are liquidated and the potential capital gains are then shared between the unitholders. We sometimes see a sharing of the performance achieved between the management company and the investors, called “carried interest”.
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What Are The Advantages Of Investing In An Fcpr?
Private equity allows you to make an investment decorrelated from the financial markets, diversified across several companies or project companies, and with a high potential for return, between 5 and 10%. Risky Mutual Funds pool your capital with that of other investors to access a type of investment previously reserved for institutions and for smaller investment amounts, starting from only € 10,000.
With regard to FCPIs and FIPs, in addition to the performance of the fund, you benefit from a reduction in subscription tax and an exemption from income tax on any capital gains.
What Are The Risks Of Investing In An Fcpr?
The major risk of FCPRs is the risk of loss of capital. Indeed, by investing in these funds, you can lose all or part of your capital because the development prospects of the companies and project companies in which the fund invests are uncertain. This risk is the counterpart of a high potential return.
In addition, there is a risk of illiquidity since the FCPR invests in securities of unlisted companies, which are not as liquid as equities. There is no real secondary market to sell these unlisted securities and their disposal usually takes several months. When you invest in this type of solution, your capital is not available in the short and medium term. And it is not possible to redeem your units before the fund is liquidated.
Finally, the valuation of unlisted securities held by the fund is based on the current value of these securities and may not reflect the price ultimately received on a subsequent sale of unlisted securities.
Subscribe To An Fcpr: The Different Ways To Invest
There are many ways to invest in FCPRs. You can choose, depending on the eligibility of the funds, to buy shares of private equity funds in pure registered form, or via a securities account , a PEA or a PEA PME , or in the form of lodged units of account. within a life insurance contract . You can also invest in private equity through your holding company. This situation concerns you particularly if you are an entrepreneur who has made a contribution-transfer of securities to your holding company and must re-use the proceeds of your sale within the framework of article 150-0 B Ter.