Investment banking, M&A and private equity hold up despite French presidential election uncertainty

William Turvill
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Emmanuel Macron and Marine Le Pen will compete in the final round of the election (Source: Getty)

French investment banks have enjoyed a strong start to the year, new figures show, despite uncertainty around the presidential election.

Mergers and acquisitions (M&A) and private equity activity also appear to have held up, despite the voting.

French investment banking fees have totalled $1.1bn (£0.9bn) so far in 2017, according to Thomson Reuters, up 31 per cent on the same point last year.

Read more: Markets toast Macron triumph in French election as euro rises

It has been the best start to a year since 2007 for French investment banks, which command 16 per cent of total European fees so far this year, their highest share since Thomson Reuters records began in 2000.

Completed M&A transactions have generated $521.8m in advisory fees, a 10-year high.

Mergermarket, however, today reported that newly-agreed deal activity had slowed in the first quarter. Although the total value of new deals was steady at €14bn (£11.9bn), the number of deals fell to 167, a quarterly low since the autumn of 2013.

Elsewhere, research from S&P Global yesterday suggested that the outcome of the election “may not have a meaningful impact of the fortunes of the private equity industry”.

A report said: “Looking at macro indicators and deal activity over the last three presidential election cycles our analysis suggests that, perhaps unexpectedly for the candidates, previous presidents and their policy agenda have had little impact on the fortunes or direction of the French economy in general or the private equity industry in particular.”

Read more: Private equity buyouts of UK companies start year at highest level ever

Speaking to City A.M. ahead of the weekend’s voting, which saw Emmanuel Macron and Marine Le Pen advance to the final round of the election, the chief executive of French private equity firm Omnes Capital said he thought it was unlikely that one of the extreme candidates would be elected.

Asked whether the election was affecting his business, Fabien Prevost said: “Not really. It seems so inconceivable to have either a communist or a fascist running the country that we just purely can’t believe it.

“Maybe we’re half asleep all of us, but that hasn’t stopped our business at all. Even in the dealflow, we still see the same dealflow. We don’t see signs like [the ones] we saw when [Francois] Hollande came into power five years ago.”

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