{"id":2086,"date":"2012-02-21T13:14:48","date_gmt":"2012-02-21T12:14:48","guid":{"rendered":"https:\/\/www.rudebaguette.com\/?p=2086"},"modified":"2019-05-17T18:36:15","modified_gmt":"2019-05-17T16:36:15","slug":"taxing-times-french-asset-management","status":"publish","type":"post","link":"https:\/\/www.rudebaguette.com\/en\/2012\/02\/taxing-times-french-asset-management\/","title":{"rendered":"Rude VC: Taxing times in French asset management"},"content":{"rendered":"<p><em>This article was originally posted on Mark Bivens&#8217; <a href=\"http:\/\/markbivens.com\/\" target=\"_blank\" rel=\"noopener\">personal blog<\/a>.<\/em><br \/>\n<a href=\"http:\/\/capitalfinance.lesechos.fr\/\" target=\"_blank\" rel=\"noopener\">Capital Finance<\/a> (part the Les Echos Groupe) features an article today on the discombobulations affecting the country\u2019s tax-incentivized fund structures: FCPIs and FIPs.<br \/>\nI\u2019ve written in the past on the <a href=\"http:\/\/markbivens.com\/m\/archives\/the-easy-money-period\" target=\"_blank\" rel=\"noopener\">perverse effects<\/a> that these taxpayer-funded structures can have on the venture capital sector.\u00a0 And for full disclosure, a significant percentage of Truffle\u2019s funds under management are in the form of FCPIs, whose closest resemblance in Europe would probably be the UK\u2019s VCT structure.<br \/>\n{As a reminder, an FCPI, or <em>fonds commun de placement \u00e0 l&#8217;innovation<\/em>, is a French fund vehicle managed by venture capital firms with a requirement to invest in innovative technology companies.\u00a0 An FIP, or <em>fonds d\u2019investissement de proximit\u00e9<\/em>, is a French fund vehicle that requires investment in a specific region of France.\u00a0 Both vehicles raise their funds from taxpayers who are in turn offered a substantial tax credit on their income tax, wealth tax, or both}.<br \/>\nThe article reveals the preponderant role that distributors play in the annual collection of these vehicles.\u00a0 All it takes is one or two large distributors to change partners, and any given fund management company or VC firm can shift from having a banner fundraising year to falling off the map.<br \/>\nI\u2019ll explore this perverse distribution game another time, but in the meantime, invite you to read the full article <a href=\"http:\/\/capitalfinance.lesechos.fr\/lettre\/1050\/fip-et-fcpi-l-heure-des-divergences-4334.php\" target=\"_blank\" rel=\"noopener\">here<\/a> (subscription required, though a free trial is sometimes available).<br \/>\nFor me, however, the money shot of the article is a citation from an anonymous professional of the sector:<\/p>\n<blockquote><p>\u00ab\u00a0Les ratios, d\u00e9lais et contraintes de toutes sortes se sont multipli\u00e9s, selon qu\u2019il s\u2019agit d\u2019un FIP ou d\u2019un FCPI, d\u2019un fonds ISF ou IR.\u00a0 Un v\u00e9hicule fiscal peut d\u00e9sormais devoir satisfaire simultan\u00e9ment jusqu\u2019\u00e0 quatorze obligations diff\u00e9rentes, voire contradictoire.\u00a0\u00bb<\/p><\/blockquote>\n<p>Roughly translated: [The ratios, deadlines, and myriad investment constraints governing these fund structures have ballooned.\u00a0 Such vehicles nowadays often find themselves in a situation of having to satisfy up to 14 different investment constraints concurrently, some of which can even be contradictory.]<br \/>\nThis is unhealthy.\u00a0 As we\u2019ve witnessed with the U.S. tax code, legal complexity combined with high stakes benefits the lawyers not the entrepreneurs.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>This article was originally posted on Mark Bivens&#8217; personal blog. Capital Finance (part the Les Echos Groupe) features an article today on the discombobulations affecting the country\u2019s tax-incentivized fund structures: FCPIs and FIPs. I\u2019ve written in the past on the perverse effects that these taxpayer-funded structures can have on the venture capital sector.\u00a0 And for<\/p>\n","protected":false},"author":77,"featured_media":64796,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"subtitle":"","footnotes":""},"categories":[113],"tags":[9364,9365,7886],"class_list":["post-2086","post","type-post","status-publish","format-standard","has-post-thumbnail","category-finance","tag-fcpi-en","tag-fip-en","tag-venture-capital-en-2"],"acf":[],"_links":{"self":[{"href":"https:\/\/www.rudebaguette.com\/en\/wp-json\/wp\/v2\/posts\/2086","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.rudebaguette.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.rudebaguette.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.rudebaguette.com\/en\/wp-json\/wp\/v2\/users\/77"}],"replies":[{"embeddable":true,"href":"https:\/\/www.rudebaguette.com\/en\/wp-json\/wp\/v2\/comments?post=2086"}],"version-history":[{"count":0,"href":"https:\/\/www.rudebaguette.com\/en\/wp-json\/wp\/v2\/posts\/2086\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.rudebaguette.com\/en\/wp-json\/wp\/v2\/media\/64796"}],"wp:attachment":[{"href":"https:\/\/www.rudebaguette.com\/en\/wp-json\/wp\/v2\/media?parent=2086"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.rudebaguette.com\/en\/wp-json\/wp\/v2\/categories?post=2086"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.rudebaguette.com\/en\/wp-json\/wp\/v2\/tags?post=2086"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}