Delta AM completes first €75 million closing of its SME senior secured fund with EU support

(Source: European Commission)

  • The EIF is one of the main investors, using resources from the European Fund for Strategic Investments, the main pillar of the Investment Plan for Europe.
  • The fund is Delta AM’s first private debt fund and will focus on asset-backed lending for French small and medium businesses.

Delta AM, an alternative asset manager that is part of Groupe Burrus (via Dôm Finance), has completed the first closing of its senior secured fund, France Économie Réelle (FER), raising around €75 million from the European Investment Fund (EIF), backed by the Investment Plan for Europe, an anchor investor alongside Groupe Burrus and nine other key institutional investors.

The EIF commitment has been made under the “Private Credit Tailored for SMEs” programme. Launched in December 2018, it combines resources from the EIF and the European Fund for Strategic Investments (EFSI). The purpose of the programme is to foster private institutional investment in support of more market-based and tailor-made funding solutions for European small and medium-sized enterprises and small mid-caps.

The fund’s target size will be up to €300 million, aiming to invest in more than 60 new loans for European businesses, and therefore contributing to the French economy by investing primarily in French small and medium firms through senior secured debt with the use of trust. The fund aims to support French small and medium businesses in their growth strategy while respecting environmental, social and governance criteria based on companies’ philosophies on climate, job creation and social inclusion, which are priorities for moving forward with the sustainable economic transition in France and Europe. The economic crisis caused by COVID-19 has made the need to address these issues even more urgent.

The EIF seeks to support Delta AM in attracting more private capital towards the lower end of the market and crowding in new investors looking for investment opportunities.

Valdis Dombrovskis, Executive Vice-President for An Economy that Works for People, said: “I am glad that the EIF is investing in Delta AM’s France Économie Réelle fund thanks to the support of the Investment Plan for Europe. This fund offers exactly what we need for a strong recovery: tailor-made funding solutions for small and medium-sized businesses to protect jobs and foster sustainable growth.”

EIF Chief Executive Alain Godard said: “We are proud to back Delta AM’s France Économie Réelle, supporting French small and medium businesses seeking medium to long-term financing with flexible and tailor-made financing conditions. The fund will provide companies with an alternative source of financing, which is key to overcoming the current crisis caused by the pandemic.”

Carlos Andrade, Chief Executive Officer of Delta AM, said: “We are honoured that the European Investment Fund selected France Economie Réelle and allocated such a significant contribution to our fund. Undoubtedly, the EIF’s strong support has been key for this emerging French solution for small and medium firms. I would also like to warmly thank all the institutional investors for their trust and our partners within Groupe Burrus who contributed greatly to raising funds and to seeding the fund, aligning our interests with those of our clients.”

Background information:

The European Commission’s Investment Plan for Europe focuses on boosting investments to create jobs and growth by making smarter use of new and existing financial resources, removing obstacles to investment and providing visibility and technical assistance to investment projects. The European Fund for Strategic Investments (EFSI) is the central pillar of the Investment Plan for Europe. It provides a first loss guarantee, allowing the EIB Group to invest in more, often riskier, projects. The projects and agreements approved for financing under EFSI so far are expected to mobilise €546.5 billion in investments and support more than 1.4 million startups and small and medium-sized businesses across all EU Member States.

The European Investment Fund (EIF) is part of the European Investment Bank Group. Its central mission is to support Europe’s micro, small and medium-sized businesses by helping them to access finance. The EIF designs and develops venture and growth capital, guarantees and microfinance instruments, which specifically target this market segment. In this role, the EIF fosters EU objectives in support of innovation, research and development, entrepreneurship, growth and employment.

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