As evidenced by this dynamic response, the new fund has been well received by institutional investors [1]*, 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.