Private equity trends in France and Germany
Par Amélie Vérone and Hagen Gerle, Gerle Financial communications
The interest in unlisted companies among retail investors in France has only just begun!
In just a few years, unlisted funds have seen strong growth among retail investors in France. According to figures of the French financial authority AMF, assets under management in unlisted funds aimed at non-professional investors jumped from €628 million at the end of 2017 to €7.8 billion at the end of 2023 (source). A recent study by France Invest confirms that this positive trend is continuing (source).
This is a fundamental trend that is redefining the ‘classic’ asset allocation of private investors. 10 years ago, investing in non-listed companies was the exception for the general public. Now it is a relatively common way of diversifying investments.
There have been two major developments in the French market that have made unquoted investments considerably more accessible to a wide range of investors.
- Firstly, lower entry fees, which have removed a major barrier for the general public. For example, some online banks now offer their customers the chance to invest in private equity from just €25. A far, far cry from the €100,000 that not so long ago was the ‘classic’ entry ticket to this market segment.
- The second key innovation is the development of ‘evergreen’ funds, investment vehicles designed to operate for an unlimited period, unlike traditional funds which have a predefined maturity. The advantage? To enable investors to exit more easily, without having to wait for a fixed term. For retail investors, this improved liquidity is key.
According to France Invest’s latest figures for 2024, published on 15 April 2025, evergreen funds alone account for 65% of the assets invested by French retail investors in unlisted funds (source). According to the same source, these funds have an average annual rate of return of 5.8%.
The France Invest study also shows that 76% of investments by private individuals in unlisted funds were made through life insurance in 2024, across a range of market segments and fund types: private equity, private debt, secondary funds, funds of funds, etc. Inflows into these funds also continued to grow, rising by 29% last year compared with 2023. This success is certain to continue in the years ahead…
Is private equity in Germany now also catching up with private investors?
What’s the situation for Private Equity with the neighbour to the East? Is Germany under its new government (once more) becoming a nation of inventors, researchers and founders? Can the private equity sector already look forward to successful start-ups among drone manufacturers, gene therapists and computer game programmers, « made in Germany »? And will private investors also be involved when government spins the big investment wheel?
The coalition agreement (source) raises hopes for the industry. Although the term « private equity » is not mentioned once in the 146 pages, « venture capital » (“Wagniskapital”) is mentioned three times. Specifically, the agreement between the CDU, CSU and SPD states:
- « By campaigning for a Solvency II amendment and its practical implementation, we are capitalising many billions of euros by lowering the capital requirements for infrastructure projects and venture capital, among other things. »
- « Biotechnology will be promoted as a key industry and its applications will be facilitated in regulatory terms, also with regard to the new genomic techniques. We will support start-ups in this area by improving the conditions for mobilising venture capital. »
- « We will continue to improve the framework conditions for start-ups. In particular, we will increase the availability of venture capital through better investment opportunities for institutional investors. »
The last point in particular will make institutional investors sit up, take notice and stop looking enviously at France. The neighbour to Germany’s West is regarded as a European role model (source) when it comes to early-stage (start-up), follow-up financing (scale-up) for fast-growing, innovative companies and valuations for those companies above €1 billion.
ELTIFs and evergreen funds
More and more fund companies in Germany too are discovering that private equity is not only attractive for institutional investors, but also for private investors, and that it can generate a large number of assets.
Union Investment, for example, the investment company of the German co-operative banks, sees growth potential in the private markets segment, specifically among private clients. Jochen Kerler, responsible for alternative investments for private clients at Union, recently said in an interview with Bloomberg (source) that this could be achieved by launching another European Long Term Investment Fund (ELTIF), this time focussing on private equity.
The problem that traditional private equity investments generally have a longer investment period and are not considered liquid could be addressed by investment companies in Germany as well, launching more so-called « evergreen » funds. Such perpetual funds, which are already very popular in France, differ from traditional private equity funds because they do not have a fixed term. With evergreen funds, investors can usually also sell their units every quarter with an upper limit.
