FRANCE - The French National Reserve Fund (FRR) board has launched a process to select managers for a private equity programme.
The first private equity programme to be initiated by the FRR would be aimed at increasing the global return of the fund, which had a long-term performance horizon. It would also seek to contribute positively to the development and transformation of the productive sector.
The FRR said it intended to gain exposure to all segments for primary investment, thereby contributing to the development of innovative new technology businesses by financing their development.
FRR’s supervisory and executive boards said they adopted an approach structured around four major principles for this first private equity programme.
The board said these were: An ambitious initial investment programme, an allocation deliberately tilted towards European markets, investment via fund of funds managers, and broad diversification of portfolios.
On the last point, the board stressed that diversification during the fund selection phase appeared to be a critical success factor, and would help avoid risk concentration.
Therefore the board designed its initial portfolio to provide sufficient diversification around four separate lots, primarily broken down by broad geographic regions and around one or two dominant strategies, namely: European diversified portfolio, European small and mid cap, North American diversified, and international diversified portfolio of secondary positions.
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