Eiffel Investment Group, a French asset manager with a focus on impact and sustainability, has launched a new European impact debt fund targeting small and medium-sized enterprises (SMEs). The fund, named Eiffel Impact Direct Lending, will provide unitranche financing to SMEs in France and Europe, encouraging them to integrate environmental and social considerations into their operations.
Classified as an Article 9 fund under SFDR regulation, Eiffel Impact Direct Lending is supported by the European Investment Fund (EIF) and the InvestEU programme. The fund aims to raise €400 million ($435M), having recently completed its first closing at €200 million ($217M).
Eiffel Investment Group currently finances companies through private debt, private equity, energy transition infrastructure, and listed equities and credit.
Antoine Maspétiol, head of private debt at Eiffel, said that as banks currently favour private debt transactions with larger companies, this has created an opportunity for unitranche investing into SMEs, which are often overlooked.
“We have found an opportunity to concentrate on transactions with SMEs, which can be overlooked by banks who do not fully trust the [unitranche] market due to the limited number of players within this space,” he said.
Eiffel has initiated a partnership with the French firm SATEP, which aims to reduce carbon emissions in the construction sector by serving as an energy advisor for individuals undertaking renovation projects.
The company emphasises that its financing decisions incorporate a methodology designed to assess a company’s ‘territorial impact’ and ESG data. This approach ensures that investments are directed towards companies that contribute significantly to their communities, such as by serving underserved areas and creating employment opportunities.
Impact covenants are another key feature of the fund, representing legally binding commitments aimed at maximising the positive outcomes of investments.