France: Market financing, an instrument of economic sovereignty

1982. By dint of talking about risk aversion, market disaffection, domination almost without sharing for 20 years, Private Equity (private investment in capital), often presented as the alpha and omega of corporate financing innovative, emerging and emerging, we have almost forgotten that France was, for nearly a quarter of a century, exemplary by its number of direct individual shareholders (4 to 5 million) and by its ability to finance its growing companies at through its stock market.

It was in fact in 1982, under the impetus of the then socialist finance minister, Jacques Delors, that the real capitalist revolution intervened, which placed at the heart of the economic strategy of the government of the time, the strengthening of the equity of what we already called the lifeblood of the economy: our SMEs and mid-cap companies. This revolution then bears a name, which has become legendary: the Second Marché.

Regional scholarships as springboards

Thanks to Jacques Delors, companies from all sectors, of all sizes and above all, from all regions of France, often family-owned, will have access to an additional source of funding, by being authorized not to make available to the public than 10% of their capital (instead of 25%) and moreover within three years. Between Zodiac in 1983 and the bursting of the internet bubble in 2000, through the crash of October 1987, they will be hundreds to join, beyond Paris, the regional stock exchanges of the time, creating in the process, wealth and jobs.

The Lyon, Nantes, Lille, Nancy, Marseille and Bordeaux stock exchanges will thus welcome their regional champions and allow the emergence of dozens of European and world leaders, many of whom today populate the CAC 40 and the SBF. 120. Who doesn't have Hermès, Sopra, Sodexo, Beneteau, Burelle-Plastic Omnium, and so many others in mind?

However, and as the country was inexorably emptying of its industrial substance (less than 12% of GDP today) and without there being any direct cause and effect link between the two movements, the stock market of SMEs would, in particular under the effect of a movement of centralization (and banking), initiated as soon as the monopoly of stockbrokers disappeared at the end of the 1980s, gradually lose its status as an incomparable instrument of competitiveness economic and vitality of the territories.

It should indeed be kept in mind that after having experienced record years in 1998 and 2000, IPOs have only been counted for 20 years on the fingers of both hands each year.

Disturbing domination of funds

Nature abhors a vacuum, Private Equity (and Paris can be happy about it) has therefore established itself as an alternative, at least for start-ups, scale-ups, SMEs and mid-caps, becoming for them, the new "heart of the economy". However, he has not yet managed to produce a generation of leaders comparable to the previous generation and to bring out the next Xavier Niel. However, it is indeed no coincidence that development capital, almost unknown in the early 1980s in France, developed in parallel with the markets and that the best performing funds on the planet are now developing close to large stock exchanges.

And it will be necessary, to paraphrase Stéphane Boujnah, the current president of Euronext, to ensure the rotation of these hundreds of participations. And what better way than the market, including for funds, to ensure the liquidity of capital? Without it, our entire financing ecosystem will be at risk. In other words, an efficient financing ecosystem must be able to rely on Private Equity AND the market. It is time to combine them better, because over time, one does not go without the other.

Crisis vs. abundance of available savings

In this context, and grappling with the most violent economic crisis since 1945, France appears paradoxically, with an insufficiently dynamic financial market, at least in terms of renewing its rating, which is very poor compared to other nations. to the conquering economy.

Paradoxically indeed, because if the number of listed companies (as in many countries around the world) and if the number of direct individual shareholders, have not ceased to decrease in considerable proportions over the past twenty years, French savings have never been so abundant: almost 100 billion additional savings have been accumulated by the French since last March, 2/3 of which by the 20% of the wealthiest households!

Can we imagine what it would be possible to do with this windfall of a good fifty billion, by strengthening the equity of thousands of competitive companies, infused with the EMP and now over-indebted? Or by ensuring the transmission of the capital of sensitive companies, and their protection, while weighing more and more frequently on them, for relatively modest amounts on a global scale, but often out of reach for the funds of French investment, the risk of going under the foreign flag?

Some Private Equity players, aware of this potential strike force, propose to mobilize it, in particular by attacking family businesses, which they imagine, rightly or wrongly, to have become more vulnerable. And the State itself is not left out, when it launches, via Bpifrance, the creation of a fund dedicated to national SMEs and mid-cap companies, accessible to informed savers (likely to invest at least 5,000 euros) .

But commendable as they are, these initiatives will hardly be able to meet the challenges and the amounts that will be essential for a sustainable recovery and the protection of our industrial and technological assets. To be convinced of this, it should be noted that the capital strengthening plan recently devised by Bercy will involve 20 billion euros, while the OFCE has precisely assessed the equity deficit of French companies at at least 30 billion euros!


In this singular moment, the State would therefore be well inspired to call for the "general mobilization of savers" and to launch an appeal to the better-off among them, to invite them not only to invest indirectly but also directly in our companies and this, everywhere on the national territory. Directly and not just when it comes to selling your own assets! To do this, it should, as in 1982, but based on the progress of the Pacte law, encourage the "unproductive" savings of the French to be made more directly available to companies, by promoting emergence of new market places, either thematic or sectoral, or regional.

This orientation would seem all the more timely today, as the new technologies which will allow the accelerated decentralization of financing, are available: we are obviously thinking of the Blockchain and the secure trading and the lower cost of digital assets, the like what is already being offered by the London Stock Exchange, Funderbeam in Estonia, or, closer to home and all things considered, the ambitious Kriptown platform, which already presents itself as a "neo-exchange"!

It would undoubtedly be wise to promote the emergence of marketplaces dedicated to the financing of certain key sectors of sovereignty, in particular for the modest-sized companies that constitute them: we spontaneously think of companies in the agrifood sector (another sovereignty issue) which are sometimes of less interest to the Parisian financing ecosystem, or to innovative companies in the defense sector, which often have difficulty in being financed by banks and which, when they have access to funds, fear for their independence.

One could also imagine the creation of market places, in the heart of the territories, allowing the savers who live there, to participate concretely in the financing of the companies which are installed there. On this point, the regional executives probably have a driving role to play, because it is not insulting the incumbent stock exchange operator to note that as it became an "Airbus of finance" (Euronext ), it was moving away from the territories and the smaller companies that irrigate them.


It will of course be necessary to demonstrate pedagogy. Teaching savers about market mechanics and reminding them that stocks are always the safest investment in the long term will help to be successful. They will have to be taught that if an investment in shares always involves risks, it is better to have the liquidity of the stock market (always sufficient at the individual level), than to remain stuck with non-negotiable fund shares!

We will have to make our business leaders understand (which could be confirmed by our major entrepreneurs, from Bernard Arnault to Franck Riboud), that the market is the only business partner to be part of the long term, and the only way to develop your business without losing independence.

And, finally, we must tirelessly remember that the capacity of our companies, whether technological or more traditional, whether they are considered strategic or not, to finance themselves from the national territory and from the greatest number of shareholders , thus ensuring their independence and sustainability, will also guarantee our economic sovereignty.


This columns in a series was written by the Mars group to periodically comment on defense news, trying "to bring an original perspective and a little distance from the major press and institutional communication ". This informal think tank, made up of around thirty people, has set itself the objective of sharing their thoughts on the future of the defense of France and Europe in view of the electoral deadlines of 2022. "It does not happen. It is not a matter of defending the candidacy of such or such a political figure, but of proposing, in complete freedom, a vision of the defense policy that an army chief inspired by the values of the republican left, ”explains the Mars group.

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