France’s €36.3bn national pension reserve fund is looking to invest some €600m in French private debt and has launched a procurement process for up to six mandates in connection with the creation and management of dedicated funds.
The call for tender is split into two, with up to three mandates up for grabs in relation to each of the debt categories. A FRR spokesperson told IPE that each mandate would correspond to one dedicated fund, and that the €600m could be split across mandates in any number of ways.
The first set of mandates is for private placements, with the Fonds de réserve pour les retraites (FRR) noting that it could provide financing to companies in the small to medium and intermediate size categories via private placements in the form of debt or loan instruments.
The second is for the purchase of acquisition-related debt of companies also in that size bracket – “these transactions have the primary objective of financing and refinancing an acquisition or financing a merger or acquisition”, said FRR.
French regulation specifies different types of companies by size, adding ETI for entreprises de taille intermédiaire (intermediate-sized enterprises) to the SME category – petit et moyenne entreprises (PME) – more familiar in the Anglo-Saxon world.
Each mandate to be awarded by FRR would be for 12 years, with the possibility of two one-year extensions.
Interested investment managers have until noon on 17 June to apply.
The procurement process is part of the implementation of a new €2bn allocation to French illiquid assets, according to the FRR spokesperson. She confirmed that the new mandates would not represent FRR’s first foray into private debt, as it is already an investor in the Novo SME direct-lending funds launched in 2013 by the Caisse des Dépôts et Consignations and several French institutional investors, and also invests in private debt via five other funds. These can involve allocations to foreign private debt of up to 50%, while the Novo funds and the freshly tendered-out mandates are exclusively for French debt.