Thierry Bessard
Wealth Management Consultant
Financière de l’Arche Consulting, Bourg-en-Bresse (France)
Using life assurance in wealth planning strategies 

Marjorie Seminara
Country Manager France (East/Paris)

Marjorie Seminara – With 30 years of experience behind you, how do you view the transformation of the classic “guaranteed rate” life assurance policy model into the one we know today?
Thierry Bessard – Life assurance has changed dramatically over the past 30 years. From a simple financial product where the sole difference was the euro fund yield, we now have a vast range with digital playing a key role.

With this change of paradigm, how do you help your clients allocate their assets?
Low interest rates (and therefore the lower yield from euro funds) has led us to fundamentally review our client investment advice. Risk-free yield is now a thing of the past, fears about companies’ robustness are more frequent, mergers among market operators are commonplace and the tax and legal implications are forever changing. In this unstable environment, we have focused on bespoke solutions for our clients by selecting solid and responsive operators offering a comprehensive and constantly developing range. Innovative financial and real estate solutions strongly guide our selection of insurance company partners.

Over the past 10 years we have seen a boom in private equity in France. How do you explain this development?
Private equity has become a completely distinct asset class for our clients. It is clearly an important diversification asset as it entails a long investment period disconnected from fluctuations in international financial markets. It is also a means of giving more meaning to your money, by committing to a corporate project and having confidence in the men and women leading the project.

At the time of their founding or during the first years of operation, many SMEs struggle to obtain funding from banks or public institutions such as Oséo, with aid frequently being limited. How have Business Angels become the key players in SME financing?
The financing problems faced by new SMEs are easy to understand. The nature of the project is often relegated to a level below the entrepreneur’s financial capacity. The risk appears to be too high for the banks, which prefer to wait for the company to become viable before providing any financing. Business Angels fill this gap and the space left by investment funds which only finance projects offering a quick return on investment. But success takes time, with a solid balance sheet only being established after a process of trial and error…

In your opinion, what motivates the Business Angels?
It is clear that every Business Angel is seeking a high level of return on investment. And rightly so, as the risk is immense when you are starting with no track record. But the lure of profit is never the only factor: the decision depends significantly on the project leader. The human element is at the very heart of the adventure!

In your role as a consultant in equity operations, can you tell us about a deal you have been recently involved in?
We recently advised Emmanuel DEBRUERES and Jean Christophe CHETAIL, two experienced managers in the textiles sector for sportswear, outdoor pursuits and skiing, during the takeover of OXBOW, a company founded in 1985 and owned since 2005 by LAFUMA, a subsidiary of the Swiss listed company CALIDA. The deal took nearly 2 years and was concluded in June of this year.

Did any of your clients invest a proportion of their liquid assets to directly finance this SME?
Certain of our family office clients did indeed take part in the financing round, convinced of the successful return to France of this legendary brand while being fully aware that it is in a highly competitive environment and that it could take some time to realise a return on their investment.

What benefits are your clients hoping to achieve?
The repatriation of this French brand, the redeployment of its operations while protecting jobs and the vision of its management lay at the heart of the new investor-shareholders’ motivation. But it is also the objective of the OXBOW management to increase revenue from €30m to €40m within 5 years. It seems clear that the awakening of this “sleeping beauty” will pay dividends in the long term. But beyond the financial result, the new investor-shareholders will have the satisfaction of participating in the return to the limelight of a great French brand.

What are the merits for your clients of the life assurance contract, or a Luxembourg capital redemption bond in this case, as opposed to a direct shareholding?
The life assurance framework and the Luxembourg capital redemption bond can be used to place unlisted securities, such as shares in an SAS. This was our recommendation in the OXBOW deal for our family office clients via existing family wealth management vehicles.

We exploit the flexibility of the FAS specialist assurance fund for the private equity element, while managing other financial assets to create perfectly balanced diversification.

The capital redemption element for structures subject to corporation tax also enables taxes on financial products to be smoothed out and deferred. The current context is especially favourable as the fixed tax rate is set for the term of the contract, a rate based on 105% of the TME* (average sovereign bond yield) as at the time of subscription.

In this case, when the unlisted securities are transferred, there will be no tax implications for the capital redemption bond. Taxation will only take place when the capital is taken out, on the proportion of capitalised products, at the applicable corporation tax rate on this date.

Why did you select OneLife as the insurance company partner for this deal?
OneLife has been a solid company during its 30 years of existence whose sole shareholder is the APICIL Group, an operator of high repute in the French market. The solvency of OneLife (140%) provides a high level of asset protection. Of course, subscribers benefit from the Luxembourg “triangle of security” and the special status of investor. Furthermore, this Luxembourg pure player operates under the freedom to provide services in the French market and the contracts do not fall within the scope of the Sapin II Law. The company has also developed secure online systems which save us time in managing our clients’ portfolios. Lastly, we can count on their day-to-day support. The proximity and responsiveness of the sales teams and access to their experts in non-traditional assets and wealth engineering are also undeniable advantages.


In brief

  • The life assurance contract and the Luxembourg capital redemption bond can be used to place unlisted securities, via an FAS**
  • Luxembourg contracts are not subject to the Sapin II Law
  • The capital redemption bond enables structures subject to corporation tax to defer taxation on financial products (capital gains and dividends)


(*) TME: current rate at October 2020: -0.26% raised to the 0% floor

(**) Vehicle available for certain countries including France, Luxembourg and Portugal.


Marjorie Seminara
Country Manager France (East/Paris)