Let us remember that the Green Industry Law was enacted at the request of public powers, with the aim of financing the ecological transition of unlisted companies and allowing savers to participate in the productive development of the economy.
The approach initiated by this law, which came into force on October 24, 2024, will likely drain several tens of billions of euros in capital flows in a few years, to the benefit of companies that today only have limited access to market financing and constitute the fabric of SMEs and ETIs, of which the French economy has a crucial need.
Our ambition today is to offer turnkey solutions that are easy to manage and market for distributors and insurers. In this regard, we have created two separate funds: Sienna Sélection Actifs Privés, an FCPE dedicated to employee savings (made up of a maximum of 35% of target private assets), and Sienna Private Assets Allocation, an evergreen FCPR dedicated to life insurance and individual PER (with 70% unlisted assets and 30% target listed assets). In the latter case, we aim for a rate of return (IRR) of 8% net of costs per year for 8 years.[1]. Once they have reached their maturity level, these funds automatically self-liquidate with subscriptions and redemptions.
Investing in an unlisted fund requires access to a fairly broad universe, hence the creation of an evergreen FCPR in open architecture (in the form of funds of funds that allow diversification of geographical and sector exposure). We invest with well-known managers recognized for their track record and for having demonstrated their worth in terms of performance and strategy, so that we have quality management to deliver to our clients.
What are LIV’s specific opportunities?
The Green Industry Law aims to support the real economy and therefore support companies in their development. In exchange for investor funding, there is attractive profit potential, because the business leaders of unlisted companies tend to be the ones who invest the most in developing their businesses.
Within the framework of our investment funds, the key idea is to focus on thematic sectors, in particular the industry in transformation. “Live better, work better and age better” is our motto. We position ourselves mainly in the “S” and “E” aspects of ESG, through sectors such as cleantech, agritech, soft mobility, renewable energy, biodiversity, etc.
How will the LIV help accelerate the democratization of private assets, particularly among younger people?
Asset management was mobilized from the beginning to make global issues priority investment topics and today has the responsibility to face the challenge. The growing interest of savers in these issues also goes in this direction: 75% of French people are sensitive to the impact of their investments on the environment. However, this sensitivity has not yet been sufficiently translated into investment decisions.
Financial issues remain complicated to understand in the eyes of private investors, and regulations are increasingly complex and difficult to understand. Investing in a listed index is not the same as investing in the history of a company in your region. The LIV gives us the opportunity to raise awareness about what it means to invest in the private assets that are the jewel companies of our territories. As for the younger ones, most are quite playful and more educated in financial matters. They need to understand what they are investing in, what the underlying factors are, what the visions they are defending are.
The market for institutional investors (life insurers, pension funds, etc.) is increasingly less of a dream for asset managers. More than ever in 2024, people’s savings are what is coveted, especially since they have remained high since the health crisis. What do you think?
We do not rule out institutional investors, on the contrary, but the rise in rates has been violent. The institutional world wanted to reduce its unlisted investment program, shifting more towards less risky assets. Accessing the world of retail when you come from an institutional environment is very complicated, especially because of the processes that you have to understand. Asset hybridization is a real strength because we also know retail and institutional modes. Today, Sienna IM is accelerating the hybridization of listed and unlisted assets and semi-liquid strategies. Our ambition is to become a reference in this area among the wealthiest clients.
[1] Past performance is no guarantee of future performance and is not constant over time.
Source: BFM TV
