war between funeral directors, opacity of invoices… – L’Express

In the space of ten years, Funecap has become one of the heavyweights in the sector in France and the European leader in cremation: 670 million euros in turnover estimated at the end of 2023, 4 000 employees, in France, Italy, the Netherlands, Germany, Switzerland, the Czech Republic, the United Kingdom and the United States. A breakthrough that would make any artificial intelligence or metaverse start-up green with envy. The company is not listed but when the Latour Capital investment fund came on board two years ago, it was valued at nearly a billion euros. In financial terms, Funecap is a unicorn. A secret animal like its two bosses who live comfortably hidden in the shadow of their emblematic brand, Roc Eclerc. Neither boss agreed to meet with us, responding only to our questions in writing. No time, we have to prepare for All Saints’ Day… And then, they travel a lot, explained the company’s communicator. It must be said that the holding company that oversees Funecap has other areas of play: real estate development, with student and senior residences, or renewable energy with photovoltaic and biogas installations in France and the Indian Ocean.

Behind the success story of Funecap, another story is being written, that of a sector which in thirty years has radically changed its face. It all began in May 1991 when the socialist Jean-Pierre Sueur, irremovable mayor of Orléans, was appointed Secretary of State for Local Authorities. When he arrives, on his desk, a pile of reports gathers dust: the sleuths of the IGF, the General Inspectorate of Finance, and those of the Igas, the General Inspectorate of Social Affairs, point to pages long the dysfunctions of a public service where the municipal monopoly turns into a farce. Municipalities have the power to give a single company the entire organization of funerals on their territory. If other companies want to exist, they must buy all the equipment from this company and resell it at cost. Competition is non-existent, corruption of local elected officials is commonplace, price differences vary from 1 to 5 depending on the city. Sueur then decides to take a big hit in the anthill by putting an end to this monopoly situation. “A tough fight started with a first law in 1993, a second in 2004 and a third in 2008, with the aim of liberalizing the market, creating transparency on practices while lowering prices in the process,” says today today the person concerned. Death is a taboo in France. Even more so when it comes to talking about money. And then, funeral companies are not quick to put an end to their mischief. Michel Kawnik is well placed to know this. When he created the French Funeral Information Association, an independent organization, he received a quantity of small cardboard coffins at his home with his name written in capital letters. “Death is a money pump,” he says fatalistically.

Thirty after the first Sueur law, where are we? “The 1993 law means more competition but also more supervision with compulsory authorization issued by the prefectures,” responds soberly Guillaume Fontaine, the president of the National Funeral Federation. Initially, the free market played its role and hundreds of small funeral companies set up. Then the big guys started to take a bite out of the little ones, buying up these family boxes at a high price. Impossible to resist a check with five or six zeros. “We integrate around 20 to 30 companies per year. This pace should continue in the years to come,” explain the bosses of Funecap. The biggest players have fallen into the hands of investment funds or pension funds with deep pockets. Their interest? “A market which grows by almost 3% each year, insensitive to the yoyos of the economy. Growing solvency of customers with the development of funeral insurance. And prices which have continued to rise, well above the inflation”, summarizes Cathy Alegria, director of studies at the Xerfi institute. “With demographic aging, the increase in mortality will be twice as high in the next twenty years as in the previous twenty years” adds Alain Cottet, CEO of OGF, the French funeral leader. A dream investment, especially since the customer rarely complains.

The transformation of OGF, formerly General Funeral Services, reflects this financial shift. In 1993, the French champion was still the property of Lyonnaise des Eaux, which sold it in 1995 to the American SCI, which sold it in 2004 to the American private equity fund Vestar. Then, it’s the shareholders’ waltz: Astorg Partners, Pamplona Capital Management… Today, OGF is the property of the Canadian Ontario Teachers’ Pension Plan, the pension fund for Ontario teachers. “Over the last few decades, we have experienced three LMBOs,” says a company unionist. LMBO? A common financial arrangement for an investment fund: these are the profits of the company which must make it possible to repay the loan taken out by the buyer to acquire the company. At the end of the loan, the fund resells it, often to another fund, with a nice somersault. Except that during the entire period, the company must “spit out” results… “Net margins in the sector approach 8 to 10%, when they fall to 4% in personal services”, continues Cathy Alegria. So, employees are strongly encouraged to “make numbers”. On the bonus guide given to OGF funeral advisors, we read that part of the remuneration is well indexed to a funeral volume and turnover objective, and that a bonus is paid in the event of signature of a funeral insurance contract. On the Facebook group “La gazette des amis d’OGF”, some employees are letting go. “Distraught advisors informed me that in one sector of Hauts-de-France, they would have been forced to systematically include in the files the SFAO, the post-funeral formality service, without the agreement of the client. This practice is prohibited and repressed by law,” worries one of them.

In this market, although regulated, anything goes. Christian de Cacqueray still can’t believe it. This former OGF communications director created the Catholic Funeral Service, a non-profit association, in 2002, alongside Cardinal Lustiger. Two years ago, he saw the arrival of a new competitor, boosted by a very aggressive Google campaign: the Catholic funeral services of Monteynard. The same team also created an Israelite funeral service. “There’s nothing Catholic about them, it’s just marketing to abuse families who are obviously very fragile in these moments,” denounces Christian de Cacqueray.

Inflated or incomplete quotes, opacity of invoices, lack of approvals… A study by the DGCCRF dating from 2022 reveals that 68% of invoices checked revealed anomalies. “Illegitimate criticism. They come essentially from the complexity of a funeral estimate and the number of services which must, by nature, appear there. It is not a question of the sale of a single object whose price can easily be compared, but from 15 to 20 services (or more) which depend on the specificity of the funeral desired by the families”, maintain the two founders of Funecap.

To respond to this lack of transparency, OGF has just launched a new brand, “Essentiel”, where services are simplified and invoices presented all inclusive. Of low cost? No of mid low, answers Alain Cottet, a marketing specialist. Alongside these heavyweights who dominate the market, Petits Poucets are trying to break through. Like InMemori, created in 2016 by Clémentine Piazza, a former Unibail-Rodamco executive: “We want to revolutionize practices, moving away from commercial codes to adopt those of care and personal service.” Others are limited to providing additional services to funeral directors. After all, we will remain consumers until the grave.