Dunas Capital holds first close for debut impact fund

The fund is classified under Article 9 of the SFDR. It aims to invest in line with the Impact Management Project, the GIIN
(Global Impact Investing Network) IRIS+ System, and the UN Sustainable Development Goals (SDGs), according to a statement.

Dunas is using its internal advisors for the fund, with Absolute Impact Investments acting as the project manager and investment advisor, and presenting investments to the firm's investment committee.

Borja Fernandez Galiano, head of sales at Dunas Capital, told Unquote that the firm had been working on the impact fund for around three years, with the fundraise launching in September 2021. The first close was held in April 2022.

The fund launch is part of Dunas' transition towards being a sustainable manager with ESG-compliant products, Galiano said. "Over the past two years, we have been identifying products and territories with Absolute Impact," he said. "We wanted to identify the projects then go to the market, rather than the other way around. Once we identified the two projects we wanted to develop, we knew we wanted to raise EUR 50m, as this is what will be needed for all the projects we want to develop."

The fund will make direct brownfield investments, rather than companies, and has identified two projects in two different regions, mainly covering the south of Spain, Galiano said.

Investments will include projects such as renting a field, hiring people, or funding training courses so that farmers can be more efficient in their farming, he said. "We could provide some debt financing, such as helping the farmers and people working in the project to buy machinery," he added.

Dunas Absolute Impact is split into three special purpose vehicles: DAI Agro; DAI Food; and DAI Renewable Energy. These will focus on the fund's three aims of sustainable agriculture, the agri-food industry, and the use of renewable energy, respectively.

The firm is confident that now is the right time for the launch of the fund, Galiano said. "The market is buoyant and willing to receive these vehicles, and our clients are willing to invest — they want to do something for humankind, plus the market is obliging companies to invest part of their assets in these types of vehicles."

The fund is currently backed by clients of Dunas Capital, including small and mid-size insurance companies. "We are not aiming to attract very large institutional LPs due to the size of the fund, but our client base is institutionalised due to the platform we bought in 2016 to launch in Spain, which manages Spanish insurance companies' money," Galiano said.

"We are confident we can reach our target with this client base; we currently have four insurance companies and one medical mutual benefit scheme," Galiano added.

Dunas Group has also invested in the fund, according to a statement.

As the fundraise continues, the GP plans to democratise the way it raises capital, by partnering a private bank that will distribute the fund among its client base, according to Galiano. "The minimum commitment for this type of vehicle is EUR 100,000, which can't represent more than 5% of the assets of an individual investor, so we need access to clients with more than EUR 2m in private assets," he said. "The private bank would be able to distribute EUR 25m and we are currently negotiating this as we have received some letters of intent."

Provided the fund sets up a private bank distribution agreement, it could hold a final close before the end of 2022, Galiano said; if not, it will hold a second close before the end of the year, with the third closing in 2023.

The fund aims to make returns of 8-10%, according to a statement. "On the food side, we aiming to change the way produce is sold and farmed, not paying money to intermediaries and the making value chain less expensive," Gaiano said.

"On the renewable energy side, we will install parks so farmers can use their own energy without connecting to the general network. In agribusiness, it's about making things more efficient, with a reduction of costs and more production."

• Tweet  
• Facebook  
• LinkedIn  
• Google plus  
• Send to  

• Topics
• Funds
• Southern Europe
• Industrials
• Spain
• Impact
• Exclusive