Firms and products


Leveraged buyouts


Investors may finance their capital contribution through a leveraged buyout (LBO). This type of arrangement is more commonly used in acquisition or growth financing transactions requiring large capital contributions.


How does an LBO work?

One or more investors set up and provide capital for a holding company that then buys a target company. The holding company borrows money on the market or takes out bank loans to finance the acquisition of the target. The holding company uses the dividends paid by the target company to meet interest and principal payments on its debt. The collateral for the debt is the target company acquired by the holding company. If the investors are the managers of the target company, the transaction is called a management buyout (MBO). If the company is bought by outside managers, the transaction is called a management buy-in (MBI).


Firms and products


Unincorporated real estate investment funds (FPIs)

Just like an unincorporated investment fund (FCP), an FPI is a vehicle for joint ownership of securities that issues units. Unit holders have none of the rights enjoyed by shareholders. The units are sold and redeemed at the holders’ request on the basis of the net asset value (plus or minus any fees or commissions). The fund is managed by a management company authorised by the AMF and under the supervision of a supervisory board whose members are elected from among the unit holders.

The real estate quota of an FPI is made up of properties, as well as shares in unlisted companies that have a majority of real estate assets (generally SCPIs) from France and other countries.

The FPI portfolio breaks down as follows:


  • At least 60% in real estate assets, which can be owned directly or through unlisted real estate investment companies.
  • A cash reserve, accounting for at least 5% of their portfolio,
  • The rest (35%) of the portfolio should be made up of financial assets (e.g. securities).


Basic tax treatment

An FPI is required to distribute to its unit holders:

  • At least 85% of the income available for distribution from rents and financial income,
  • At least 85% of the net capital gains on asset sales made during the financial year or undistributed gains from previous financial years.



The fund breaks down its income by origin into securities income and real estate income for its unit holders, who are then taxed differently on their “securities income” and “real estate income”.