Italian asset manager Pioneer Investments has launched a €200m, five-year mini-bond fund to invest in Italian small and medium enterprises (SME).
The closed fund, named Pioneer Progetto Italia, will invest in credit securities issued by firms with revenues between €10m and €100m and a minimum rating of B-.
In a statement, Pioneer said that the fund would focus on companies with a “stable competitive position, credible growth pans, positive economic and financial parameters and that seek to finance further expansion, including on international markets”.
The fund will have an option to continue operating for two years after the end of the five-year term. The minimum deposit is €150,000 and proceeds will be distributed annually to subscribers. There are four financing rounds of five months each until the fund reaches maximum capacity.
Eidos Partners is advising Pioneer with the selection of firms that will issue the mini-bonds.
Cinzia Tagliabue, chief executive of Pioneer Investments, said: “We believe we can contribute to the development of a direct brokerage network between asset management and investment that supports the Italian system.”
Earlier this month, BNP Paribas Investment Partners Sgr, the Italian asset management arm of French bank BNP Paribas, announced that it had completed the first closing of BNP Paribas Bond Italia Pmi, another closed mini-bond fund that will invest in Italian SMEs.
In the first round of financing, the fund raised €56m and targets an overall target of €150m. The fund has a seven-year term and the minimum deposit is €1m. Marco Barbaro, CEO of BNP Paribas Investment Partners Sgr, told Italian media that the fund has identified seven potential issuers of credit. Advisory firm Prometeia will assist the subscribers of the fund with further due diligence on the recipients.
Pioneer Investments, which is owned by Italian banking group Unicredit, says that the mini-bond market is growing, with 30 funds launched – including one by PensPlan Invest – on the Extramot Pro segment of Borsa Italiana, the Milan Stock Exchange, since the creation of mini-bond by Italian lawmakers at the end of 2011.
The market is now worth €12m and consists of securities with a 7-year term and coupons between 3% and 10% (6.5% on average).
Mini-bonds were created by the ‘Development Decree’ of 2012 introduced by Mario Monti’s government, as a measure to encourage lending to SMEs.
The measure has been the object of a passionate debate within the Italian institutional investor community, with critics arguing that pension funds and other investors should not step in to finance small and medium enterprises to make up for the lacking appetite for credit by the banking sector.
Groupama was awarded a global balanced mandate to manage a portfolio of global fixed income and equities for the €670m fund.