Vincent Martet explains us what a French SICAV is

Vincent Martet, manager of a successful SICAV a few years ago, would like to talk to you today about this type of French company, which is not as well known as the traditional SAS or SARL. Indeed, its name may sometimes be known but its concept remains unclear. Small decryption of the SICAV.

What does the acronym SICAV mean?

It is an open-ended investment company. In other words, a financial undertaking in which capital is invested that fluctuates positively or negatively, as Vincent Martet points out. This definition leads us to a second acronym: UCITS for Undertakings for Collective Investment in Transferable Securities. Why on earth? Quite simply because a SICAV belongs to the UCITS family. As a company, a SICAV is therefore a legal entity with a regular board of directors deciding on the investments to be made.

The world of SICAV

As you will understand, the type of SICAV company belongs to the stock exchange world. More specifically, SICAVs are investment companies to which retail investors entrust their funds. Indeed, SICAVs are among the best types of company to entrust its equity portfolio.

The purpose of SICAVs

The primary purpose of the SICAVs, as Vincent Martet reminds us, is to centralise capital from several investors in order to limit the risks of financial losses and share profits. To this end, mutual funds such as the one formerly managed by Vincent Martet (CDC Gestion) set up additional equity portfolios to limit the risk of stock market losses. Indeed, an investor alone cannot easily diversify his portfolio and limit his financial risks. This is why the SICAV works with these investors, reminds us of Vincent Martet. Thus, this type of company allows investors, as individuals, to have access to a diversified portfolio of financial equities without the need for particularly large amounts of invested capital.

How are SICAVs managed?

There are several ways to administer a SICAV: bank, insurance company, brokerage company (as Vincent Martet did). An investor in a SICAV becomes a shareholder, as in most current companies. Shareholders therefore deposit funds while the manager is responsible for building and managing portfolios of securities (shares and bonds).

Four SICAV profiles

In fact, Vincent Martet reminds us that there is not only one type of SICAV but several profiles: we have diversified it, specialized in equities, specialized in bonds, short-term bonds and cash. Beginners on the stock exchange tend to opt for a diversified SICAV because it is the most secure. But let us remember that the profitability of this type of company depends above all on the efficiency of its management, as for any company.


FCPs (Fonds Commun de Placement) is a system of co-ownership of transferable securities. It therefore does not function exactly like the SICAV, although it is similar in that it also belongs to the family of UCITS (discussed above).

FCPs issue funds bought and/or sold by investors and a management company manages this mutual fund.

Although they are both important financial products in the stock market, these two investment funds are not as similar as they appear to be, says Vincent Martet, a finance professional. In fact, knowing their differences makes it possible to make the best choice in terms of financial investment.

Their main differences lie in the legal nature of each of these companies. Thus, if the SICAV is a public limited company issuing shares, the FCP is a joint ownership of transferable securities. Moreover, the quality of subscribers is not the same: they are shareholders in a SICAV and unit-holders in a mutual fund. Finally, the minimum capital requirement also differs: it is 7.5 million euros for a SICAV and less (400,000 euros) for a mutual fund.

Thus, knowing the differences between SICAVs and mutual funds is subtle, but it can also sometimes be a lifesaver when you are planning to invest. This allows a better understanding of the highly technical and sophisticated UCITS market. This is an important point when one considers the financial risks inherent in this market.

It must therefore be well understood and deciphered by the future investor. To do so, the latter can obtain an information document from the financial intermediary to help him/her make an informed decision.

The drawback of mutual funds explained by Vincent Martet

Cost is the main drawback of mutual funds. Indeed, interest is slightly lower as the bonds are subscribed to guarantee the capital. Moreover, Vincent Martet points out that management fees and subscription rights are not to be neglected… Finally, an investment in a SICAV is not as liquid as another financial asset such as a share. For this reason, when subscribing to this type of financial corporation, the investor must take into account entry and exit fees and management fees.