Innovation mutual funds: Investing in the transformation of the economy

FCPIs (fonds communs de placement dans l'innovation) are strategic investment tools for investors looking to combine potential returns with an active contribution to the real economy. By channelling their capital into fast-growing companies, often positioned in buoyant sectors such as advanced technologies, renewable energies or biotechnology, investors are part of a dynamic that is both patrimonial and socially responsible.

These vehicles not only enable investors to diversify their portfolios effectively, but also to play a part in shaping a more sustainable future, while benefiting from attractive tax arrangements under certain conditions.

As with any investment exposed to unlisted or emerging assets, FCPIs carry risks. A precise assessment of your investor profile is essential.

FCPIs are venture capital funds designed to finance French or European SMEs deemed to be innovative. These companies must meet specific criteria in terms of research and development, technological innovation or the development of high value-added products.

The capital is pooled among several individual or institutional investors, and entrusted to an approved management company that selects the holdings. This selection is based on a rigorous analysis of the growth prospects, business model and capacity for innovation of the target companies.

The objective: to support the expansion phase of promising companies, while aiming to increase capital value over the long term (often 5 to 10 years).

The managers of these investment funds select companies on the basis of their growth potential, their ability to innovate and their positioning in expanding markets.

There are several options for supporting innovation while diversifying your portfolio. Here is an overview of the main investment solutions.

Private equity funds

Private equity funds aim to finance unlisted companies, generally in the development phase. This type of fund makes it possible to support innovation while assuming a higher risk for potentially higher returns. Thanks to Eurazeo's expertise in private equity, individual investors can participate in the growth of strategic companies via dedicated funds.

Private equity funds

Private equity funds focus on direct investments in private companies. These funds are generally more selective and offer attractive returns, but carry higher risks.

Real estate investment funds

Real estate investment funds offer a stable diversification option while supporting innovative real estate projects, such as green building or urban regeneration. These funds make it possible to invest in projects with strong potential for value enhancement while enjoying regular returns.

Innovation mutual funds (FCPI)

FCPIs are specifically designed to invest in innovative companies, often in the start-up or development phase. These funds are particularly attractive for investors wishing to support technological or scientific projects. They also benefit from tax advantages, while entailing higher risks.

Risk mutual funds

FCPRs (venture capital funds) are suitable for investors seeking high returns by supporting innovation projects. They carry higher risks, but offer the opportunity to participate in high-potential projects.

Disruptive technologies

Artificial intelligence, cybersecurity, robotics, blockchain... emerging technologies are at the heart of tomorrow's digital economy. By investing in these areas, we can capture significant growth opportunities while supporting technological sovereignty.

Health and biotechnology

Medical research, the rise of biotechnologies and the digitalisation of healthcare represent major growth drivers. FCPIs focused on this sector finance companies involved in the fight against chronic diseases, innovative therapies or intelligent medical devices.

Energy transition and sustainable development

FCPIs focusing on renewable energies, clean mobility or low-carbon technologies play an active role in environmental transformation. These investments are in line with the European objectives of carbon neutrality and green growth.

Access to unlisted innovative companies

FCPIs offer privileged access to an investment universe that is difficult to reach directly. This "early stage" positioning means that, if successful, they can benefit from rapid growth that sets them apart from listed markets.

Intelligent asset diversification

The companies selected for FCPIs often do not follow traditional stock market cycles. This decorrelation is a relevant lever for diversification, particularly against a backdrop of increased volatility on listed markets.

Tax incentives

Subject to certain conditions, FCPI funds can enable individual investors to benefit from income tax reductions or deductions from the IFI tax base. These tax benefits are designed to encourage participation in the financing of national innovation.

Sector strategy and investment philosophy

Give preference to funds with a clear investment thesis, focused on growth sectors in line with your personal convictions (health, ecology, digital, etc.).

Track record and reputation of the management company

A solid track record and an experienced team are guarantees of quality. Analyse previous vehicles under management, their payout ratio and net performance.

Management fees and exit conditions

Take into account entry fees, management fees and any performance fees. Also check the liquidity conditions: some FCPI funds require you to lock in funds for several years.

Investing in innovation means taking on more risk than traditional funds.

• Risk of capital loss: growth companies are inherently more vulnerable.
• Liquidity risk: unlisted securities are difficult to sell before the fund matures.
• Sector risk : concentration on specific segments can amplify fluctuations in the event of an economic or technological downturn.

Eurazeo offers private investors a range of funds dedicated to innovation, accessible from €10,000. By capitalising on its recognised expertise in private equity and its privileged access to innovative European companies, Eurazeo builds tailor-made vehicles that combine impact and performance.

As a leading institutional player, Eurazeo ensures rigorous investment management, enhanced transparency and local support for each investor.

Innovation mutual funds are a differentiated investment solution geared towards growth, asset diversification and social commitment. Aimed at investors who want to combine meaning and performance, they represent a strategic lever for structuring a portfolio for the future.

This article has been written by Eurazeo Global Investor for information purposes only. It does not constitute an offer to subscribe or personal advice. Please consult your advisor before making any decision. Past performance is not indicative of future performance. Investments in private equity funds involve a risk of capital loss and illiquidity.