January 4, 2018

French asset manager Amundi is launching a €150m (US$180M) private debt fund backed by luxury Italian agri-food products such as Parma ham and Parmesan cheese. The fund is targeting between 10 and 20 investments averaging 10 million Euro each, according to Private Debt Investor.

Under the structure of the fund, the firm will invest in private bonds issued by Italian food businesses which are then guaranteed by the food products themselves. The fund will be managed by Amundi’s 12-person private debt team which has €5.5 billion (US$6.6 billion) in assets under management, as well as local teams on the ground in Italy. The fund also has an established relationship with the Italian unit of Crédit Agricole Group, which will bring its expertise in the agri-food sector, provide credit risk analysis, and leverage its presence in the Italian agri-food space to source potential deals.

“This privileged access to Italian producers of cured ham and Parmesan cheese allows us to diversify the counterparties of bonds that we structure,” said Pierre-Henri Carles, head of private debt for Amundi, Italy. “Each issue is backed on average by a dozen different companies.”

Amundi sees itself as playing a critical role, filing an existing financing gap created by reluctant banks while also bringing together food companies in need of capital and investors in need of diversification.

“In a context in which banks remain reluctant to finance companies, given the constraints they face in terms of equity and liquidity, we have a major role to play in connecting companies with investors seeking performance and diversification in their credit portfolios. Financing the agri-food sector is a natural step for a group that has its origins in agriculture,” said Amundi’s head of real and alternative assets Pedro Antonio Arias.

Mangiare!

Long known as a leading provider of luxury leather products and fashion, Italian luxury foods have been emerging as an investable category that offers exclusivity and taps into the wellness movement, reports the Financial Times.

Italy’s high-end food industry is dominated by family-run businesses that produce premium products, but which lack the funding to market themselves in a way that would achieve international scale. Poised for growth, the country’s premium food sector has been attracting the attention of high net worth investors.

“There is more growth potential than in personal luxury goods because healthy is a global trend — it also costs €600 for a Louis Vuitton bag but €30 for a great piece of prosciutto,” Francesco Moccagatta, managing director of M&A firm N+1 SYZ, told the Financial Times.

This latent potential in the Italian, and the broader European food ecosystem was recognized in the summer of 2016 by global IT leader Cisco which partnered with Italian innovation hub H-FARM to launch a food accelerator program outside of Venice, Italy.

For Amundi, the shared goal of supporting Italy’s burgeoning food industry takes the form of being a facilitator of growth for companies. The firm has completed successful pilot programs over the course of six months to test the validity of its private debt fund and to align its tax structure and has now opened the fund to institutional investors with the goal of generating an annual return over six years. 

“We wanted to create a new and innovative product, but we needed to come up with a standardised [sic] solution,” Carles told Private Debt Investor. “The pilot process helped us develop the bond as well as develop pipeline opportunities.”

-Lynda Kiernan