Idinvest closes ISIA fund on €340m

Francesca Veronesi
21 May 2019

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Idinvest has held a €340m final close for its Idinvest SME Industrial Assets fund (ISIA), surpassing its €300m target.

The vehicle, which was launched in Q1 2017 and held a first close on €150m in Q4 that year, is Idinvest's first fund dedicated to the modernisation of production tools for European SMEs by leasing them industrial assets.

At the time of the fund's first close, Idinvest explained the fund was launched because SMEs are struggling to get adequate financing structures to modernise their means of production, especially in the context of tighter restrictions placed on banks with Basel III.

ISIA's management team, led by Sylvain Makaya, is made up of five investment professionals.

ISIA is backed by 15 institutional investors, a third of which are sovereign wealth funds. The remainder consists of insurance companies, pension funds, banks and corporates, Unquote understands.

Close to 35% of the investment comes from European and non-French LPs. The European Investment Bank (EIB) and the European Investment Fund (EIF) are among the LPs backing the fund.

The vehicle aims to support 50 companies, mostly based in France, Spain, Benelux and Germany. To date, ISIA has already supported 15 companies and financed nearly 50 pieces of industrial machinery.

Some of the fund's investments include €7m invested in both France-based construction firm Locamod and Spain-based tunneling machines company Terratest, as well as €12m in UK-headquartered packaging specialist Uni Packaging.

The fund makes investments in the €1-15m range, with a sweet spot around €5m, and with an average financing duration of five to seven years. The minimum turnover of the backed businesses is €10m.

ISIA is looking to stand out from the existing financing available to SMEs by investing through leasing arrangements, helping companies to rotate their equipment quicker and incur shorter amortisation periods. It will finance strategic machinery in the industrial sector (construction, engineering, machinery), consumer goods sector (everyday consumer products, publishing and print), health sector (medical engineering, robotic surgery) and the base materials sector (chemicals and packaging).