FCPs (Fonds Commun de Placement) are mutual funds from the UCITS (Undertakings for Collective Investment in Transferable Securities) family.
FCPs are open-ended collective investment funds. Each unitholder has a co-ownership of the fund assets, proportional to the number of right shares.
FCPs and SICAVs are really similar but differ on several points:
- Legal status
- Lower minimum capital requierement
- No obligation to publish resuts, etc.
As a result, FCPs may adopt riskier strategies than SICAVs. Vanilla FCPs are widely distributed by retail banks to investors. More exotic FCPs can be can be listed as below:
- FCPRs (Fonds Communs de Placement à Risques). They are invested in at least 50% in unlisted companies. They have the advantage of being exempt from all taxes (excluding social security contributions) if the assets remain frozen for at least 5 years. Do not forget, however, that the risk is significant.
- FCPIs (Fonds Communs de Placement dans l’Innovation). They are invested in at least 60% in shares of listed and unlisted innovative companies: high-tech sectors such as computers, Internet, telecommunications, biotechnology. FCPIs are also subject to tax deductions.
- FCIMTs (Fonds Communs d’Investissement sur les Marchés à Terme). They participate in the futures markets. FCIMT shares are not listed.
- FCPEs (Fonds Communs de Placement Entreprise). They are part of an Employer/Empoyee agreement.
- FIPs (Fonds d’Investissement de Proximité). FIPs are venture capital funds investing in unlisted local securities SMEs. Once again FIPs benefit from a tax incentive system.
Do not hesitate to have a look at our FCP – Fonds Commun de Placement database.
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