Bpifrance to deploy €4.2bn in the first stage of Mubadala-backed “LAC 1” fund

Bpifrance is ready to deploy the“LAC 1” fund with an investment capacity close to 4.2 billion euros. In addition to the Abu Dhabi-based sovereign wealth fund, Mubadala Investment Company’s contribution of 1 billion euros, the “LAC 1” fund onboards over twenty new investors alongside Bpifrance.Following the Memorandum of Understanding (MoU) signed by the two parties in February 2020, the investment by Mubadala was completed at the first closing of the fund on26^th May 2020. With a current investment capacity close to 4.2 billion euros, including over 3.2 billion euros raised from investors and 1 billion euros of debt, this fund invests in French listed multinationals, leveraging on Bpifrance’s knowledge of the technological transitions and on its strong expertise in the governance of listed companies.

The successful closing of the “LAC 1” fund underpins the attractiveness of France for investors and sovereign wealth funds from the Middle East. Bpifranceis offers to selected investors the opportunity to invest – through LAC 1 – in successful French listed equities with an active role in the governance applying a private equity’s investment strategy. The fund has been set up to invest significant long-term capital in leading French companies with the objective of supporting their strategic plans and maximizing value creation. The target of the fund is to raise 10 billion euros to be invested in approximately 15 to 20 listed companies with a market capitalization above 500 million euros. The companies will be selected from a large pool of French world-leading corporations over the next decade.

Furthermore, as the world is facing many challenges as the economic aftereffects of the Covid-19 pandemic, the French economy’s resilience and the “pro-business” reforms that have been undertaken foster foreign investors’ confidence in French listed companies.

Since its inception, Bpifrance has successfully supported and accompanied its listed portfolio, with a strong return significantly above the relevant indexes generated for its exits representing 15 billion euros. A similar strategy of long-term active involvement will be replicated for LAC 1 companies, with the same final objective of maximizing value creation for its subscribers. In parallel, a dedicated ESG policy will allow ensuring that environmental, social, and governance criteria are met and growth sustainable over the long term.

In addition to Mubadala Investment Company, over twenty investors participated in this first closing alongside Bpifrance, including large international and French institutional investors such as Covea, Axa, CNP Assurances, Crédit Agricole Assurances, BNP Paribas Cardif, Groupe Generali, Groupe VYV, Société Générale Assurances, le groupe Caisse des Dépôts, Natixis, AG2R LA MONDIALE, Aviva France, Groupe Groupama, Scor, CCR as well as large corporations and family offices, including notably Orange, Groupe Unibel and Financière Dassault.

Nicolas Dufourcq, chief executive officer of Bpifrance, states: “This first closing has been a key landmark for both confirming the investment thesis of the LAC 1 fund by tier one and internationally renowned investors and also acknowledge the investment track record and the know-how that Bpifrance teams have been building for more than ten years. The well-performing, internationalized, and innovative multinationals that we aim to invest in will also have the support required to further development in the GCC and the Middle East.”