Perspectives

Macquarie in France: Exploring the investment landscape

23 November 2020

As countries around the world navigate the economic impacts of COVID-19, the French government recently announced a €100 billion stimulus package in September 2020, bolstering interest among international investors. 

“France has always been a dynamic market, but mainly for domestic investors. Increasingly larger project opportunities are opening up for international players,” says Elise Vaudour, Global Head of Private Capital Markets Principal, within Macquarie Capital’s Infrastructure and Energy Group, based in Paris.  

Fady Lahame, Head of Macquarie Capital’s Advisory and Capital Solutions business in France, agrees adding, “a consistent trend seen over the last few years in M&A markets is a greater level of interest in France from foreign investors.”

He adds that economic activity has bounced back relatively quickly this year. “Since the end of the main lockdown in September we have seen a strong rebound, with deal flow really picking up between mid-June and the end of July. There seemed to be a lot of pent up demand - investors had capital ready to deploy.”

Stéphane Brimont, Head of France and Benelux at Macquarie Infrastructure and Real Assets explains pressures on the public purse are also a driver of new investment. “Public authorities are increasingly looking towards private capital to fund and operate high quality infrastructure in the telecom, transport, utilities, renewable energy and healthcare sectors. They recognise that they can attract long-term investors to help meet their investment needs by defining their infrastructure strategy and evolving the regulatory framework.”

Globally sectors that met the needs of businesses and consumers during lockdown, such as healthcare, infrastructure, technology and software have remained buoyant. These are also industries, in which France is a leader as Mr Lahame points out, “if you look across the French corporate landscape there’s a very high proportion of companies in the infrastructure sector that are world leaders in industries such as energy, environmental services, airports, transport and construction.”

Erti Gjonaj, Head of Macquarie’s Commodities and Global Markets business in Paris, suggests the range of sectors that Macquarie covers and access to its wider global platform of capabilities, makes it an attractive partner to clients. “We work across the whole commodities sector, while agriculture is a particularly important sector in France, we also see opportunities across gas, power, emissions, oil, metals, investor products and FX. A key focus is to increase our market share and continue to provide tailored structured solutions in risk management and financing across these sectors, while some of our competitors have been pulling back.”

Digital fibre and 5G technology are also attracting international investors, says Ms Vaudour. However, it is sustainability that provides some of the most exciting opportunities according to Macquarie’s Parisian team.  

Mr Gjonaj asserts, “there’s generally growing interest in environmental products and we’re helping companies with their green transition. There are also huge opportunities in the food sector with increasing demand from consumers for environmentally friendly, zero carbon products.”

Ms Vaudour highlights technologies such as hydrogen and carbon capture have moved, from the research and development stage, into practical applications.  

“In our view, hydrogen will be one of the next big technologies and many investors who missed the early push into renewables now regard it as a second opportunity to support the low-carbon transition.”

Stéphane Brimont, Head of France and Benelux at Macquarie Infrastructure and Real Assets 

Macquarie’s presence in France since 2006 and its reputation for investing for the long term has positioned it well to handle major infrastructure project financing and to support foreign investors in France.

“We have a French team on the ground in Paris and well-established long-term relationships. Investors appreciate the breadth and depth of Macquarie’s infrastructure expertise combined with an extensive knowledge of the French market” says Mr Brimont. “And now more than ever before, sustainability is a focus for our clients. It’s embedded into our approach, and we have the skillset across Macquarie to support governments and clients in realising their decarbonisation ambitions.”   

Mr Gjonaj agrees “we have commodity and FX experts based in Paris. We also cover more niche, less liquid markets, such as dairy, pulp and paper, petrochemicals, packaging, coking coal and aluminium premium. Close collaboration and knowledge sharing between our specialists is also a benefit to our clients.”

“There’s direct alignment between the firm’s strength in terms of advisory capability and the market opportunities in the French landscape both for corporates and financial investors,” adds Mr Lahame. “You need to have a French team on the ground to navigate regulations, as well as a strong business culture.”

Macquarie’s culture is another point of differentiation in the market. “The investors we work with like our agility, but the fact that we have the means to invest enables us to also be a major financial player and so they get the best of both worlds,” says Ms Vaudour.

Ms Vaudour continues, “our presence in France also anchors our many important collaborations with French firms in assets and transactions around the world. The recently announced collaboration between Macquarie’s Green Investment Group and Total S.A. in South Korean offshore wind is an excellent case in point. It’s the firm’s ability to take a project from a blank sheet of paper to completion and our strong sense of purpose really seems to resonate with our clients in France and internationally.”