In 2024, French private equity firms raised 38.9 billion euros from investors and invested 36.9 billion euros in 2,881 companies and infrastructure projects, according to France Invest. These figures illustrate the growing role of private equity in financing the economy and highlight the importance of the legal structures used to organize these investments.
Among them, the Société de Libre Partenariat (SLP) has established itself as one of the leading frameworks for French management companies
Created in 2015 to enhance the appeal of the French financial market, the SLP is now widely used by investment management firms to invest in unlisted companies, private debt, infrastructure, or other alternative assets. Modeled after Anglo-Saxon limited partnerships, it offers considerable legal flexibility while benefiting from a regulatory framework defined by the Monetary and Financial Code.
But what exactly is an SLP? How does it work? Why has it become a benchmark vehicle in private equity? This article helps you understand how it works, its characteristics, and its role in the private markets ecosystem.
What is a Free Partnership Company (SLP)?
The Société de Libre Partenariat (SLP) is an alternative investment fund (AIF) with legal personality. Established by the Macron Act of August 6, 2015, it is governed by Articles L.214-154 et seq. of the Monetary and Financial Code.
Its goal is to offer a French vehicle capable of competing with structures widely used internationally, particularly Luxembourg or Anglo-Saxon limited partnerships.
The SLP is particularly well-suited to long-term investment strategies in unlisted assets. It is therefore used to structure funds for:
Unlike a traditional commercial company, an SLP is not intended to engage directly in operational activities. It serves as a collective vehicle for bringing together investors around a defined investment strategy.
Why was the SLP created?
Before 2015, many French funds were structured abroad—particularly in Luxembourg—in order to take advantage of more flexible investment vehicles that were better known to international investors.
The SLP was established to achieve several objectives:
- strengthen the competitiveness of the French asset management industry;
- attract international investors;
- provide a more flexible legal framework than some existing vehicles;
- to facilitate the structuring of private equity funds in France.
This development is part of a broader effort to develop Paris as a financial center and to support corporate financing.
Today, the SLP is used by many French asset management companies to launch funds intended for professional investors and, depending on the circumstances, for a broader client base, in compliance with applicable regulations.
How does an SLP work?
The SLP is based on an organizational structure inspired by Anglo-Saxon partnerships.
It distinguishes between two categories of partners:
General Partners
The general partners are responsible for managing and representing the company. In principle, they have unlimited liability for the company’s debts, which reflects their active role in the governance of the vehicle.
Limited Partners
Limited partners provide the capital used to finance investments. In return, their liability is limited to the amount of their contributions, subject to compliance with the rules set forth in the articles of association and applicable regulations.
This division of roles helps align the interests of investors and management teams, a principle that is widely accepted in the global private equity industry.
What types of assets can an SLP hold?
One of the SLP's main strengths lies in the diversity of assets it can accommodate.
In accordance with the strategy defined by the management company, an SLP may invest in:
- unlisted companies;
- growing small and medium-sized businesses and mid-sized companies;
- capital-transition transactions (buyouts);
- venture capital;
- private debt;
- infrastructure;
- certain real estate assets;
- other investment funds.
This flexibility makes it possible to build diversified portfolios that meet a variety of investment objectives.
Why is SLP particularly well-suited for private equity?
Private equity is based on a long-term investment horizon, generally ranging from eight to twelve years. The companies receiving funding need time to implement their growth strategies, make acquisitions, or accelerate their growth.
The SLP is designed to support this approach to long-term value creation. Its structure offers considerable flexibility in organizing the relationship between investors and the management company, particularly with regard to governance, the distribution of cash flows, and the fund’s lifespan.
This flexibility explains why the SLP has become one of the preferred vehicles for private equity funds.
What are the advantages of a General Partnership?
A high degree of contractual flexibility
The articles of incorporation of an SLP can be tailored to a large extent to the needs of investors and the investment strategy, in accordance with the regulatory framework.
A vehicle recognized internationally
Modeled after limited partnerships, the SLP is more easily understood by international institutional investors, which makes it easier to raise capital.
A wide range of investment opportunities
The SLP can accommodate various strategies in private markets, thereby offering management companies a high degree of flexibility.
Governance Tailored to Unlisted Assets
The distinction between general partners and limited partners makes it possible to clearly define responsibilities and decision-making authority.
What are the limitations of SLP?
Like any investment vehicle, the SLP also has certain limitations.
First of all, it is primarily intended for investors who are able to tie up their capital for several years. Since the assets held are illiquid, early redemption options may be limited depending on the fund’s characteristics.
In addition, investments made through an SLP are subject to the risks inherent in private markets: risk of capital loss, changes in company valuations, economic conditions, and the time required to divest holdings.
Finally, the quality of asset selection and the support provided to those assets is a key factor in the success of a private equity strategy.
What is the tax treatment of an SLP?
The tax treatment of a Société de Libre Partenariat depends primarily on its legal status, the status of its investors, and the terms chosen when it was structured.
In practice, an SLP is generally structured as a tax-transparent vehicle. Income and capital gains are, under certain conditions, taxed directly in the hands of the investors according to their own tax regimes.
This transparency is one of the factors behind its success with international institutional investors. However, tax treatment may vary depending on the investor’s status, country of residence, and the nature of the distributed income. A personalized analysis is essential before making any investment.
SLP or FPCI What Are the Differences?
The Société de Libre Partenariat and the Professional Private Equity Fund (FPCI) share similar objectives: to facilitate investment in unlisted assets.
The main difference lies in their legal form.
The FPCI a securities investment trust without legal personality. The SLP, on the other hand, is a corporation with legal personality, organized around general partners and limited partners.
This difference gives the SLP greater statutory flexibility, which is often valued by international investors. In practice, the choice between these two vehicles depends on the management strategy, regulatory constraints, and investor expectations.
The Société de Libre Partenariat has established itself as the leading vehicle for structuring private equity funds in France. Its legal flexibility, its operations—which are modeled on international standards—and its ability to invest in a wide range of unlisted assets explain its growing popularity among management companies.
For investors, the SLP is primarily a legal framework that provides access to long-term strategies in the private markets. Like any investment in unlisted assets, however, it requires a long-term investment horizon, involves limited liquidity, and necessitates a careful analysis of the associated risks.
At a time when financing the real economy is playing an increasingly important role in the investment portfolios of institutional and high-net-worth investors, the SLP exemplifies the shift toward greater flexibility and openness in investment vehicles, while operating within a recognized French regulatory framework.
FAQ
What is a Free Partnership Company (SLP)?
The Société de Libre Partenariat (SLP) is an alternative investment fund (AIF) with legal personality. Established in 2015, it allows for the structuring of funds that invest primarily in private equity, private debt, infrastructure, or other unlisted assets. Modeled after Anglo-Saxon limited partnerships, it offers considerable legal flexibility while being governed by the Monetary and Financial Code.
What is an SLP used for?
An SLP brings investors together around a common investment strategy. It is primarily used by management companies to finance unlisted companies and support their long-term growth.
What is the difference between an SLP and an FPCI
The main difference lies in their legal structure. The SLP is a corporation with legal personality, whereas the FPCI a securities co-ownership arrangement without legal personality. Both vehicles allow for investment in private equity, but the SLP offers greater statutory flexibility, which is particularly valued by international investors.
Who can invest in an SLP?
SLPs are primarily intended for professional or sophisticated investors. Depending on applicable regulations and the fund’s characteristics, certain non-professional investors may also be eligible to invest, subject to certain conditions.
What are the main advantages of an SLP?
The SLP offers several advantages: a high degree of contractual flexibility, a governance structure tailored to long-term investments, generally transparent tax treatment, and the ability to invest in a wide range of unlisted assets, such as private equity, private debt, and infrastructure.
What are the risks of investing in an SLP?
Like any investment in unlisted assets, an SLP carries a risk of capital loss. These investments are generally illiquid and require an investment horizon of several years. Their value depends, in particular, on the performance of the companies being financed and on market conditions.
Is an SLP limited to private equity?
No. Although it is widely used to structure private equity funds, an SLP may also invest in other alternative assets, such as private debt, infrastructure, real estate, or certain other financial instruments permitted by regulation.
What is the tax treatment of an SLP?
The tax treatment of an SLP depends on its structure and the profile of each investor. In practice, it is generally organized according to the principle of tax transparency, which means that income and capital gains are taxed directly at the investor level, according to their own tax regime.
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