FRANCE – Total assets under management in French long-term employee investment funds, Fonds Communs de Placement d”Entreprise (FCPE) fell from €54.7bn in 2000 to €52bn in 2001, a drop of 5%, according to latest annual survey undertaken by AFG-ASFFI, the French asset management representative organisation.
The AFG-ASFFI says that the decline is the direct result of the continuing downturn in the equity markets but that the longer term view is more positive. Over five years, the minimum investment period for the retirement savings system, épargne salariale, the greater the investment in equities, the higher the return, says AFG-ASFFI. The annual return for FCPEs over five years was 12.5% last year, representing €1.1bn.
AFG-ASFFI points out that the problems encountered by the stock markets are not affecting fixed income markets, which continue to grow. Investments in fixed income by FCPEs reached €2.5bn last year, with annual returns of 3.4%.
However, AFG-ASFFI believes that this would have been even higher, were FCPEs that chose fixed income as their primary investment class not able to place up to 25% of their assets in equities as well. Over five years, the FCPE fixed income market posted annual returns of 4.98%, representing €2.2bn.
A spokesman for the AFG-ASFFi says that it is difficult to predict how the funds will perform this year, given that the markets are still volatile, though he doesn’t think the situation will worsen.
The survey gauged the performance of asset management companies that looked after FCPE funds with minimum assets of FFr10m (€1.5m) last year. This results of the survey were thus based on 33 asset managers running 3,185 eligible funds between them.