This business line has a joint approach to private equity, private debt, infrastructure and real estate funds, all of which have developed strongly in recent years across the world. At present, financing of the global economy relies to a large extent on this class of unlisted asset, which has experienced growing success. One of the drivers of this investment vehicle’s success is that it offers some of the highest profitability (compared to listed vehicles) whilst being a low volatility investment. Another factor is that governments are increasingly looking to the private sector to contribute to financing the real economy. Real estate funds in particular are being called upon to play a role in construction project financing.
These funds are experiencing rapid growth and need the support of a reliable, long-term partner throughout their lifecycle. This is where the Premium Client Solutions division Crédit Agricole is involved, combining the expertise of its three members.
Regarding closed-end real estate funds, Indosuez Wealth Management, Crédit Agricole group’s wealth management arm, offers its specific expertise to support fund managers, with regards financing their carried interest. Indeed, to ensure managers meet regulatory requirements intended to align their interests with those of unitholders, they are required to personally invest a minimum of 1% of the fund’s total assets. Indosuez Wealth Management can help them define the best suited solution depending on their financial status.
During the fund’s life, Crédit Agricole CIB (CA-CIB), Crédit Agricole group’s corporate and investment banking arm, contributes its expertise by providing investment and acquisition advice, as well as asset based financing over the investment period. It offers liquidity solutions (refinancing, trade sales) during the fund’s divestment phase. CA-CIB also offers comprehensive hedging solutions (forex, interest rate derivatives).
CACEIS is involved at several levels: in particular as depositary and registrar when the fund is established, then as administrator throughout the life of the fund. CACEIS is in charge of managing relationships and flows between the management company and the fund’s investors. CACEIS and CA-CIB provide equity bridge financing to closed-end funds. As Arnaud Garel-Galais, Group Head of Coverage & Business Development of PERES at CACEIS, points out: “Equity bridge financing is a short or medium-term (two to four years) facility made available to investment fund managers. It is designed to optimise the management of the financial flows between investors and the management company, such as those related to company acquisitions and management fees. Such financing has several advantages for investors and fund managers: it makes it possible to postpone and reduce the number of capital calls to investors. This improves the fund’s internal rate of return and is also greatly appreciated by investors because it enables them to better view the schedule of capital calls.”
Ranking among the leading service providers on the market, the three partners offer a comprehensive and robust servicing solution provided by experts in their respective fields. CACEIS is the number one depositary in France for private equity, private debt and infrastructure funds, and is one of the leading players in Europe.
In order to better serve its clients, CACEIS has set up a dedicated private equity and real estate funds team, which includes all support and operational functions.
CACEIS is not only a service provider, but also a partner that supports management companies in their development in real estate funds.