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Government intervention in the Economy

Is CDC Entreprises useful outside of the "com" for the State?

Sunday 8 April 2012, by Bernard Zimmern, Emmanuel Sala

CDC Entreprise is the operating arm of Caisse des Dépôts, in the creation and development of SMEs. There is no measurement of its efficiency; it is everywhere but its weight is negligible, outside of helping government advertising and offering well furnished end carriers to the Treasury civil servants.

Is CDC Entreprises useful outside of the "com" for the State?

CDC Entreprises is the operating arm of the Caisse des Depots, a financial government agency, created to "facilitate the development in equity of growth companies." This is one of the key routes of state intervention in the industrial economy. The gossips say that it is also one of the state agencies where the staff from Bercy, our treasury department, seeks to end his career as wages and pensions are greener there than elsewhere.

To read or to listen to the actions of CDC Entreprises, this fund is everywhere, with interests in 190 private equity funds, including 70 regional funds; it invests directly through the Strategic Investment Fund, is in charge of the Start-up National Fund (FNA, “Fonds National d’Amorçage”), of France Investissement to which Prime Minister Francois Fillon, has announced a state new grant of 6 billions, etc..
In total, outside of the breaking news effect for the government, and outside of the usefulness of CDC Entreprises for "communication" of the senior civil service prevailing at Bercy, the Treasury minister, and, to some extent at the Elysee Palace, one can be greatly doubt the effectiveness of this organization and of the taxpayer money invested in it.

1. CDC Entreprises has never been able to provide a record giving the performance of funds it has invested nor even the jobs it has helped to create. The only published figures are the number of companies where it has some investment, directly or indirectly, as if being in many places was enough to guarantee performance.

2. One can question the effectiveness of CDC Entreprises when examining for example under what conditions must operate the FNA: invest in "innovative companies" understood only as manufacturing, while innovations to be encouraged are first marketing innovations, funding by FNA leading to ridiculous small amounts unable to cover the additional costs incurred by the qualifying conditions. It would be wise to send an independent auditor to check where the funds are finally allocated, funds managed by important business angels having declined to benefit from them, to our knowledge.

3. In any case, the funds distributed by CDCE have very little impact. After review of the 2010-2011 yearbook "participations of CDC Entreprises", the intervention of the CDECE in the creation and enterprise development is ridiculous. Indeed it appears that the aggregate investments of CDCE up to 2009 is 2.7 billion €, while all funds invested by AFIC (Association Française des Investisseurs en Capital), that encompasses the majority of venture capitalists, has invested in the past decade more than 68 billion €, of which 9.7 billion in venture capital and $ 29.8 billion in capital development.

4. CDC E interventions appear to be dictated by the need to be everywhere , for the necessities of communication, so nowhere. When examining CDCE holdings, there is for instance no link with the size of the fund where CDCE has invested.

CDCE participations in funds managing companies (K€)

Correlation between the size of the funds and CDCE participation


Size of the fund in K€

The value of the correlation coefficient shows there is no link between the size of the fund and the amount contributed to the fund by CDCE

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