SJ. Galadima (Alphacap): “The democratization of private capital is positive for the French economy”

Those who make decisions. What is the genesis of your platform?

Suleiman-Jean Galadima. The team started with a fairly simple observation: from any stock exchange site, investors can access all the information related to costs, past performance, volatility and distribution of registered funds. In contrast, when we look at the unquoted – equity, private debt, real estate, infrastructure – the multitude of investment vehicles and underlying instruments makes comparing, selecting or even identifying them too difficult. Based on this observation, we decided to structure a platform that covers the entire range of unlisted stocks, targeting individual and professional investors. In order to achieve our goal of selecting only the best quality funds (structuring, management, taxation, commissions, risk/return ratio), we carry out extensive screening of funds and support the client in choosing the solution that best fits their profile. .

Why Invest in Equity?

Many investors today are interested in and want to invest in private equity because this asset has historically outperformed traditional financial markets, which are extremely volatile today. As a result, we are seeing significant growth in direct investment subscriptions. According to Invest Europe, new vehicles will raise €118 billion in 2021, an all-time high. The previous record of 114 billion euros was set in 2019.

The goals of the Macron law, and then the Pacte law, aimed at bringing the depositor closer to the company, contributed to its popularization…

We are seeing a “retail trade” in private capital, particularly after the Pacte law was passed and the level of inflows increased. Today, people want to support the project more, participate in the development of companies, the growth of the country and understand the use of their savings. Direct capital that helps startups break through, SMEs grow, or unicorns grow is thus tempting by supporting them.

How does this popularization affect the sector?

The hyper-growth of private equity mechanically prompts us to wonder whether, with such large inflows of capital and such high valuations, portfolio management companies will always be able to deliver on their promises to outpace the financial markets. Our conviction on this matter is quite radical. Indeed, when you double or triple your collection, it is very difficult to be so selective in your investment strategy. We believe that the democratization of this asset class is positive for the French economy. Nevertheless, he requires even greater rigor in choosing the best funds, in diversifying his subscriptions.

How can people make this choice?

This is not obvious because, unlike other asset classes, there are few ratings or public data on private equity funds. Our recommendation to investors is to systematically check the track record of management companies and their executives. This is done to ensure that past vintages and participation in them have produced performance that is consistent with the originally announced goal. If investors have sufficient assets to invest in professional funds for which the minimum subscription is 100,000 euros, we invite them to prefer those instruments that have more flexibility in their investment policy. Alphacap covers all segments of private equity and cooperates with French, European and North American management companies.

How do you support your customers?

Our investors seek to invest calmly, quickly and stably. To do this, we determine, according to their profile, their risk appetite or their assets, the ideal allocation in unlisted companies. Some investors, for the most knowledgeable, can do this themselves using the platform’s features. All parameters of the fund, including fees, risks, maturity and performance, are displayed in a transparent and balanced manner. The taxation of the funds is also analyzed, particularly for investors who wish to be exempt from capital gains tax, as offered by certain tax FCPRs or FPCIs. Entrepreneurs in a contribution transfer situation looking for solutions that qualify for the 150 0-B ter can also evaluate our selection at Alphacap.

Some real estate funds that invest in real estate business and development are also exempt from MFIs. There is also the subject of the various investment formats used for equity investing:

– direct, also called pure nominative;
– through PEA-PME for eligible FCPRs or ordinary accounts in securities, also called registered shares with administration;
– by French life insurance or PER (pension savings plan) for certain FCPRs;
– through Luxembourg Life Insurance for FPCI or SLP.

Luxembourg life insurance allows investors to access direct investments within an optimized tax and regulatory framework.

Final word?

Alphacap offers quality fund selection and supports its investors in rapidly implementing a diversified and sustainable allocation that is not listed on an exchange. Every investor can actually know the classification of the Sustainable Finance Disclosure Regulations (SFDR) to which a fund belongs and thus assess the environmental, social and sustainability characteristics of their investments.

Interview by Juliet Woods