The Financial Performance of Solidarity-based Investment Funds[La performance financière des fonds d'investissement solidaires en France]

This article examines the financial performance of French solidarity-based investment funds, also known as "90-10 funds", which combine 90% responsible listed assets and 10% solidarity assets from Social and Solidarity Economy (SSE) enterprises. These funds have grown significantly since the early 2000s, in response to the challenges of sustainable development and SSE financing. However, their dual objectives-stemming from their hybrid structure, which seeks both financial returns and social impact-raise important questions about their (under)performance compared to conventional funds. Based on an original sample of 49 French solidarity-based investment funds, this study investigates the factors influencing their financial performance, with particular attention to the role of their solidarity component and their level of sustainability commitment over the period 2020-2023. Key insights emerge from this study: i) the in-depth statistical analysis reveal that these funds perform close to their benchmarks, while displaying lower volatility and risk exposure, as evidenced by beta coefficients and information ratios; ii) the econometric analysis, highlights a statistically significant and substantial negative impact of the solidarity component on financial performance. However, this factor alone does not fully account for the observed underperformance, which also reflects the influence of sustainability constraints and the presence of a non-linear relationship between ESG intensity and returns.