the situation funds market | France

1.1 Market Definition and Structure

Turnaround funds, also known as capital turnaround funds, are gradually making their way into the French economic landscape with large-scale takeovers such as Doux and Sephora.

These funds invest in companies in poor health, often burdened by excessive debt or other internal problems. Their mission is then to "turn around" the situation by restructuring the target company's activities and providing financial and human resources.

For a long time the market remained relatively confidential. Today, there are only about 200 turnaround funds in France, while the number of bankruptcies is close to 50,000 each year.

Large firms have developed restructuring activities (KPMG, EY...) but do not invest directly in companies in difficulty. This role is usually played by private equity funds (Bridgepoint for example). The most important in France are Impala, Butler and Arcole Industries.

The regulatory environment remains very restrictive for turnaround funds and favors employees above all. As the economy is in an expansion phase, the number of bankruptcies is decreasing, but the opportunities remain numerous for the funds thanks to their small number.