French asset manager Amundi plans to raise up to €200 million from a combination of retail and institutional investors to support a vehicle focused on Italian food products.
Pierre-Henri Carles, head of alternatives and real assets at Amundi Italy, told Agri Investor the Amundi ELTIF Agritaly fund launched earlier this year and reached a first close on €70 million in April. Fundraising has focused, he said, largely on Italian retail investors making minimum commitments of €10,000 that have averaged about €30,000.
The seven-year fund seeks 6 to 7 percent gross annual returns through provision of bonds and quasi-equity instruments to Italian producers of wine, cheese and ham products with protected designation of origin classification from the EU.
“There is more interest in agri because, in general, people are more interested in what they eat,” said Italy-based Carles, who joined Amundi in 2015. “The key here is real economy. There are a lot of people that claim their fund is real economy but at the end of the day, it’s funds of funds and far from the real economy. This is really close to the real economy.”
The first iteration of the vehicle, Carles explained, was established in 2017 after the firm noted financing struggles of family-owned ham and cheese producers during the periods when their products were aging. By extending financings of up to six years to such companies, Amundi can immediately support strategic investments by producers.
The Paris-headquartered firm has already invested €100 million through that first fund, which Carles said has produced a 6 percent gross yield.
The fact many of the businesses to which it lent registered steady or increased sales during 2020 despite removal of foodservice channels, demonstrated the resilience of demand for the Italian food products and inspired an expansion of the strategy into wine, he added.
Carles said Amundi expects to reach about €100 million by the end of the 2021, at which point it will gauge demand to determine whether it will target a final close on €150 million or €200 million. Whereas the first version of the Agritaly fund relied on commitments of at least €500,000 from institutions like pensions and insurance companies, he said, the firm plans to wait until 2022 to expand from its current focus on Italian family office investors.
“This year is only retail,” said Carles. “If things go well and we still have demand next year, we are planning to open to institutional.”
In fundraising from such retail investors, he added, Amundi benefits from both the existing familiarity many potential LPs already have with Italian products and the straight-forward nature of the investment. Because such investors are often unaccustomed to hold periods as long as seven years, storytelling can be especially important, he added.
“It’s not rocket science. We say: ‘We invest in producers that do ham, cheese and wine,’” Carles said. “It’s easier for retail to get a sense of exactly what we are going to do with their money.”
Italy is the predominate focus of investments from the vehicle, but Carles explained its strategy allows for up to 30 percent of capital to be deployed outside of Italy, within the EU.
“When we talk about denomination of origin, there are only two other countries that are really important: France and Spain,” he said. “You can find the same kind of products: wine that needs to be aged, cheese that needs to be aged and prosciutto – especially in Spain – that needs to be aged.”