New Fund Offer, first closing: Successful launch of the new social impact private debt fund from Groupama AM
After its first closing, Groupama Social Impact Debt - a newly launched private debt impact fund from Groupama AM - has raised close to 150 million euros.
As evidenced by this dynamic response, the new fund has been well received by institutional investors[i], attracted by the targeted return and the social dimension of this unique investment solution.
Classified as an Article 9 fund under the SFDR*, Groupama Social Impact Debt is characterized by its thematic social engagement. In accordance with goals 8 (“Access to decent work”) and 10 (“reduced inequality”) of the UN SDGs**, the strategy of the fund is to contribute actively to job creation and to increase the purchasing power of the employees of the small to middle-market companies financed by the fund.
Social impact metrics
The impact on these two social pillars will be measured by a set of indicators, such as the number of new jobs created, the proportion of employees on permanent contracts, the number of internships, the degree of profit sharing (reward schemes, equity incentives and bonuses), salary growth and the wage gap ratio.
In detail, Groupama Social Impact Debt will be invested in private debt, mainly issued by French small to middle-market companies, although some Western European issuers are also included. More than 75% of the portfolio will consist of senior and unitranche debt. The amounts invested in each company will be 5 to 20 million euros, with maturities essentially set at 5 to 7 years.
The success of this first closing demonstrates the interest of our clients in this asset class, which is a perfect complement to listed debt. This investment solution combines the characteristics of an Article 9 impact fund with a fund targeting small to medium-sized business, and it has a gross return objective of more than 6%,Xavier Hoche
Chief Investment Officer at Groupama AM
It is to be noted that the principal risks of this fund are capital risk, credit risk and liquidity risks.
A solution that contributes to financing the real economy
The launch of Groupama Social Impact Debt is in line with the ambition of Groupama AM to develop new diversification solutions over a broader spectrum of asset classes offering high potential returns for investors. This aim is all the more crucial in the current unprecedented and complex macroeconomic context of inflationary tensions, rising interest rates and the risks of recession.
It is in this economic context that we have decided to conceive this new solution, at the service of both investors and companies. As a subsidiary of a mutual insurance group with a strong commitment to the real economy, we are deeply attached to our approach of partnering with small and mid-market companies, which we continue to support over the long term. Debt as a financing tool helps these businesses to meet their social challenges. The response of the companies has been excellent, as measured, among other factors, by the number of financing requests received even before the fund was officially launched.Emmanuel Daull
Head of Private Debt at Groupama AM
Following the close of the NFO period of the fund, which has an overall target of 200 million euros, the closing of the second subscription period is planned for the end of the year.
The introductory subscription enabled us to bring together some of the leading players in insurance and pensions, alongside the Groupama Group as fund sponsor. Looking ahead to the second closing, we are already planning to offer Groupama Social Impact Debt to our Spanish, Italian and Portuguese clients in addition to French institutional investors.Olivier Le Braz
Global Institutional Customers Manager.
This document is exclusively addressed to professional clients as defined in MFiD
*Article 9 fund under the SFDR: Article 9 corresponds to the classification governing financial products that have sustainable finance as their objective, according to the terms of the European “Sustainable Finance Disclosure Regulation (SFDR).
**UN SDGs: Sustainable Development Goals defined and promoted by the UN. This set of 17 goals aims provide a shared blueprint for peace and prosperity for people and the planet by the year 2030
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