The vehicle, Idinvest SME Industrial Assets Fund, began raising 18 months ago and had an initial target of €300 million. It has been closed to accelerate its deployment. The fund is managed by Sylvain Makaya who will lead a team of five investment professionals with experience in leading, asset-based finance and mezzanine investing.
The fund is backed by 15 institutional investors, five of which are sovereign wealth funds. It has been backed by the European Investment Bank and the European Investment Fund, with other investors including corporates, a university, insurance companies and banks. Idinvest said almost 35 percent of the fund’s investment comes from outside France.
ISIA will purchase industrial equipment to lease to SMEs based in France, Spain, Benelux and Germany and can also do leaseback transactions, where it buy existing industrial equipment from SMEs and leases it back to the company, freeing up cash for other projects.
Makaya said: “Banks are currently only lending for mass-market equipment deals of less than €2 million, or at the larger end of €20 million or more. We will aim to target equipment needs in the €2 million to €15 million range where there is a financing gap.”
The fund has four origination channels. The first is Idinvest’s existing and historic portfolio companies. The second channel is through a digital platform launched last year giving SMEs direct access to Idinvest. Thirdly, the fund has engaged with regional governments in France and elsewhere to develop relationships with local SMEs in need of this type of financing.
The final origination channel is through engagement with industrial corporate. Idinvest has begun discussions with Airbus to finance its supply chain by providing leasing services to its SME subcontractors and hopes to engage in further discussions with major corporates that to make their supply chains more resilient.
The fund will aim to support more than 50 operations and has already supported 15 companies by financing more than 50 pieces of industrial equipment.