Caisse des Dépôts to spin out venture arm

CDC Entreprises Innovation, the venture capital subsidiary of the Caisse des Dépôts, is negotiating its independence from the French state-owned institution, according to a source familiar with the situation.

He said negotiations were going quickly because both the the venture team and the state institution were broadly in agreement about the future of the business as an independent manager. A decision is expected in the next month.

CDC Entreprises Innovation has around €360 million under management and is part of CDC Entreprises, the Caisse des Dépôts unit which manages all of the state-owned company’s €4.2 billion private equity programme, including third-party money.

The venture firm will continue to manage two venture capital funds, its Fonds Commun de Placement à Risque, and six high-tech mutual funds or Fonds Commun de Placement pour l’Innovation.

It has invested in life science companies, information and telecommunication technology and innovative industries, including Arkadin, an online conferencing services company, and Xytis Pharmaceutical, a biotech firm.

Its two main funds are the €112 million FCPR Science & Innovation 2001 and the €145 million FCPR CDC Innovation 2000, which run alongside six much smaller high tech funds worth €105 million in aggregate and which are in partnership with Caisses d’Epargne, La Poste and  Crédit Agricole.

CDC Entreprises Innovation declined to comment.

CDC Entreprises other direct investment operations are unaffected by the talks, the source said. They include CDC Entreprises Services Industrie, which provides growth capital growth for companies valued at less than €75 million; CDC Entreprises Capital, which invests equity in buyouts of companies valued at less than €75 million; and IFE Conseil, a mezzanine house.