Pictet AM Launches Environment Co-Investment Fund I Eltif

Pictet Asset Management also expands its offering in private and alternative assets. The Swiss management house is launching the Private Assets Sicav – Environment Co-Investment Fund I, its second strategy available on the Italian market in the form of ELTIF, also authorized for distribution in the retail segment, after the Pictet Real Estate Capital Elevation Core Plus Eltif.

The new solution therefore expands the group’s offering within private markets and represents Pictet’s first thematic private equity instrument for Italian private clients, with a focus on innovative investments in environmental technologies. The minimum subscription amount is 10 thousand for the retail share class (R EUR class). Eltifs are long-term closed-end funds launched in 2015 by the EU to allow all savers to invest in the real economy.

The fund builds on Pictet Group’s track record in thematic investing and 300 co-investments

The new fund, launched by Pictet, which has the legal form of a Closed End SICAV under Luxembourg law and complies with ELTIF (European long-term investment fund) regulations, has an expected duration of ten years, with the possibility of extending the maturity by another three. The strategy will be classified as an art fund. 8 under the SFDR (the EU regulation on sustainability disclosures in the financial services sector).

The sub-fund benefits from Pictet’s thematic expertise to carry out private equity co-investment transactions, investing directly in unlisted companies (rather than in existing funds) and supporting the main private equity managers at a global level (General Partner).

The strategy aims to identify those solid and innovative companies, capable of riding the trends of sustainable change and exploiting today’s great challenges to their advantage in one or more of Pictet’s five high-conviction segments: sustainable consumption, circular economy, control of pollution, enabling technologies and reduction of greenhouse gases.

“Private assets allow you to invest in companies with very high potential that are usually outside of traditional investments. We are talking about companies with structurally solid margins and a strong technological drive, characteristics that allow the investor to benefit from high risk diversification, consistent returns over time and decorrelation from short-term macro dynamics”, explained Paolo Paschetta , Equity Partner, Country Head Italy by Pictet AM. And he continued:

“The new Environment Co-Investment Fund allows us not only to enter the Italian market with a private equity product but also to make use of the skills acquired in the field of environmental thematic investments, after more than twenty years from launch of the first fund dedicated to water in 2000. As an unlisted and innovation-driven company, we make use of the experience gained within private markets through ad hoc services.”

In particular, the new private equity fund Environment Co-Investment aims to reach its target of 20-25 co-investments, carried out through a rigorous selection process. The strategy will look in particular at companies active in North America and Europe, following the three main investment approaches of private equity: growth equity, to identify healthy companies that need capital to grow; buy-outs, to provide a new dimension to quality companies in private markets; venture capital, investing in high-potential startups.

Furthermore, the strategy implements the Planetary Limits scientific framework in its approach to environmental investments to direct private capital towards environmental technologies. The Climate Policy Initiative calculates that climate finance will have to increase by at least 590% to reach the objectives set for 2030. Therefore, although the current penetration rate of environmental technologies is still low today, growth is expected by then with a potential value of approximately $12 trillion.

Led by Pierre Stadler, head of thematics PE, and Nicola Thomas, thematics principal, the fund builds on Pictet Group’s track record in thematic investing and 300 co-investments since the first deal in 1992. Pictet currently manages 20 thematic strategies, including 8 environmental strategies, with a team of over 70 investment professionals.

Other funds besides Pictet AM’s one

On the subject of ELTIF, last March there was the launch, also on the Italian market, of the Swiss Life Funds (LUX) Privado Infrastructure SICAV-ELTIF, the infrastructure Eltif of Swiss Life Asset Managers , the managed savings arm of the largest Swiss life insurance company Swiss Life, founded in 2011 with over 10.2 billion euros under management. The fund was built in compliance with the Eltif 2.0 regulation.

And again, last March 1st, the Azimut Group and Muzinich & Co. sgr announced the first closing of the collection of the Azimut Private Debt Capital Solutions II – ELTIF fund for almost 120 million euros . The rescue financing fund , like the previous one, is established by the Luxembourg management platform of the Azimut Group, Azimut Investments sa , and managed under delegation by Muzinich & Co. sgr.

The fund, which was launched in June 2023, like its precursor, has the objective of supporting the entrepreneurial fabric, financing Italian companies with revenues exceeding 50 million euros, solid in fundamentals and with excellent future prospects, who are facing a temporary phase of equity or financial imbalance.

The first fund in the series was launched in 2020, with the final closing of the collection then carried out in mid-2021 at 147.5 million euros. That fund was fully invested in 12 companies , selected through the evaluation of over 300 operations in just 3 years of activity. Azimut Private Debt Capital Solutions II – ELTIF will remain on placement until the end of July 2024.

In 2023 there was also the launch of Finint Eltif Capital for Innovation , the first ELTIF of Finint Investments sgr dedicated to venture capital. And again, in October 2023, Schroders signed an agreement with the Sella group for the distribution of the Schroders Capital Private Equity ELTIF 2023 sub-fund, the long-term European private equity fund structured as Eltif by Schroders Capital launched in March 2023 and which BeBeez had anticipated October 2022.

The Eltif market grew in 2022 by just over 50% compared to 2021. Almost 4 billion additional euros flowed into these products. Based on a survey conducted among management companies in April 2023, Scope Ratings estimated a market volume of approximately 11.3 billion euros at the end of 2022. And the Italian market reached 2.6 billion , of which 95% attributable to private customers. A sign that Italy is on the right path to winning the challenge of bringing small retail investors closer to the unlisted world.

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