Overview
- The commission published its report on Monday and concluded that many investment funds use leveraged buyouts to shift company cashflows to owners, a practice it labels predatory and systemic.
- The report explains an LBO as a takeover financed mostly with borrowed money that is repaid from the target company’s future revenues, and it warns that excessive cash extraction can hollow out firms and leave them fragile.
- Parliamentarians single out Bpifrance for strongly supporting private equity and say this support, together with tax advantages, has tilted public policy toward fund growth while the bank’s chief, Nicolas Dufourcq, disputes that portrayal.
- The inquiry highlights revolving-door hiring between senior officials and funds, citing specific ties such as between Bpifrance leadership and Cathay Capital, and raises concerns this undermines oversight of fund practices.
- Reporters and officials note the sector’s scale: roughly 670 fund managers oversee about €300 billion and finance thousands of firms that employ millions, and investigators say the funds’ rise dates to policy shifts since 2012 that reduced bank-led restructuring finance.