Italian agrifood excellence on Amundi’s menu at the Geneva Forum
An innovative successor fund investing in resilient agribusiness excellence in Italy will be presented by Amundi to family investors at Campden Wealth Family Office and Investment Forum in Geneva on October 6-7, 2021.
Amundi SGR, the third-largest asset manager in Italy, with around 200 billion euros ($ 234 billion) in assets under management, this year launched the closed fund under Italian law Amundi Eltif AgrItaly PIR, to invest via an ELTIF vehicle , conforms to the PIR regulation.
The financing structure has already been tested on iconic Italian agri-food products such as Parma and San Daniele ham, as well as Parmesan, through the first generation AIF Agritaly fund. Today, Amundi has adapted it to Italian PDO wines as well, with the launch of the successor fund, Amundi ELTIF Agritaly PIR Fund.
Amundi said the € 7 billion ($ 8.2 billion) Italian market for these products has proven resilient in the first half of 2020, despite the impacts of the Covid-19 pandemic. However, these products take time to mature and inventory financing from local banks has been more difficult to obtain.
The current market environment, combined with the industry’s strong leverage, makes it difficult to secure additional funds from traditional funding sources, hence the growth cap, Amundi said.
Before his presentation at the Swiss Forum, Pierre-Henri Carles, Head of Real Assets at Amundi SGR, declared CampdenFB the new fund will invest mainly in bonds and opportunistically in other quasi-equity instruments, with medium and long term horizons to offer flexibility to producers in the implementation of the growth strategy.
What message do you want to send to family investors in person at Family Office and Investment Forum?
The real economy is becoming a popular theme among alternatives, like ESG or green bonds, although there is a lot of greenwashing, so we thought the simpler the fund, the better at attracting an audience. wider. This is why we launched Amundi Eltif Agritaly PIR, which is a real fund to offer family businesses alternative financing by monetizing their stock.
Why did Amundi Italy SGR launch the Agritaly fund?
We launched the successor fund in 2021 and one of the reasons was that we launched the first generation fund in 2017, which focused on food products, especially cheese and ham. Fortunately, we noticed during the Covid-19 crisis that these products were very resistant because people like to continue to consume these products. The food sector has been resilient and wine and food producers are seeking medium and long term funding to invest and keep their business growing.
We decided it was the right time to launch this second generation fund with a big focus on Italian PDO wines, as this industry really needs new ways to finance its growth in terms of investments. Our investment model was quite interesting and attractive for PDO wine producers in Italy.
What benefits will family investors get from their investment in Agritaly?
While the fund offers strong guarantees for at least 70% of target investments (inventory is 100% pledged), investors can expect a recurring dividend stream of around 5% over the medium term ( about six years) in a defensive context. industry, which is quite attractive in a low interest rate environment.
Most of the producers are family businesses. We invest in products with a Protected Designation of Origin (PDO), which makes the products more reliable, which are protected at EU level. What is important is that 100% of the inventory is pledged, which means that we have real guarantees, since we own the bottles of wine or other products in which we invest. These are real protections for investors.
Does Amundi plan to launch a version of Agritaly in other European markets?
The first initiative focused on Italy because it is one of the first countries in terms of emblematic agricultural products with PDOs, but with producers who are struggling to find inventory financing from local banks. Again, this is important for us, because it means that we invest in products that are protected at EU level.
Amundi Eltif Agritaly PIR is a simple asset backed financial product allowing investors access to local producers primarily in the Italian wine industry. It offers attractive protection in the event of a downturn with the commitment on the entire inventory while offering clear medium and long-term financing to local producers seeking to develop their activities. You have access to an inventory of agricultural products or a single product. You really get a feel for the real economy, you are helping local producers and funding the growth of entrepreneurs.
Amundi Eltif Agritaly PIR will be used as a pilot for a potential future broader European strategy. Indeed, the fund can invest around 30% outside Italy. We are currently looking at Spain which is a food market similar to Italy.
We did the first low-end retail fundraiser in Italy in April of this year and we had the first close at around 70 million euros ($ 82 million) – we will be raising funds until ‘to 200 million euros. We are investing this money. Around 30% has been invested, mainly in PDO wines in Italy.
In the future, we would like to raise additional funds to meet the demand. We would do another fundraising round early next year for family office investors who have an investment portfolio and are interested in a fund that has stable, predictable performance and pays regular dividends.
We know we don’t go over the hard cap of 200 million euros ($ 234 million), so 150 million euros ($ 176 million) of fundraising could be a nice target for the first half of 2022.
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