Alternatives to civil real estate investment companies (SCPI), civil companies (SC) or civil real estate companies (SCI) are developing at high speed within life insurance. In 2021, they captured 29% of consumer real estate fundraising, according to the French Association of Real Estate Investment Companies (Aspim), a professional association in the sector.
And the craze continues since these media recorded 2.5 billion euros in net subscriptions in the first half of 2022, a volume up 37% compared to the same period a year earlier.
These products, designed specifically for life insurance, are a kind of fund of funds. SCs can invest in several products: SCPIs, physical assets, listed property companies, etc. They can also keep cash, which makes it easier to manage customer inflows and outflows.
This approach has several merits: diversification and flexibility. Indeed, civil societies can develop their heritage more easily to adapt to a change of context. Finally, the dividends collected are kept within civil society to be reinvested, which makes life easier for the saver.
Good performance in lifetime residential
The other side of the coin is that they accumulate management fees: their own commissions and those of the underlyings in which they invest. On subscription, on the other hand, the entry fees are reasonable: 2% most of the time. A reassuring element, because these will be quickly amortized and it will be possible to get out of the unit of account quickly if the results are not up to par.
Another negative point is that the cash held reduces the potential return compared to the purer investment strategies of SCPIs. Last year, non-trading companies accessible in unit-linked [des supports pour lesquels le capital n’est pas garanti] thus generated a performance of +3.8% on average, while the average distribution rate of SCPIs was 4.45% (excluding share revaluation).
Inflows were, however, largely captured by thematic SCIs, on residential life, which offer above-average performances. Thus the SCI Viagénérations (Turgot AM) obtained a performance of 5.79%, and Silver Age (Federal Finance Gestion), 8.80%. Several media have recently been launched on the theme of health and they should meet with great success (Trajectoire Santé by Euryale AM or Cap Santé by Primonial REIM).