Thursday, October 24, 2013

Newborn Advam Partners sgr launches Advam1a fund dedicated to SME's debt

Advam Partners SGR announced yesterday the launch of its fund Advam1, dedicated to investments in debt instruments issued by listed and unlisted small and medium-sized Italian companies with 3-7 years duration, with a share of possible investments in corporate bonds of listed companies, covered bond banking, state securities and related ETFs .

The announcement was made simultaneously with the presentation to the financial community of the new asset management company, born from the integration of the historical asset management company Gesti-Re SGR with and Finn Investment Advisor SIM, a consulting firm specializing in investments and financial instruments. Advam Partners SGR so decided to debut with its first branded product Advam1 entering in the now quite fed audience of actors who want to take advantage of the market of the so-called minibonds. At this regard, Advam Partners SGR proposes itself with a consulting approach, in the offer of investment services: individual management, traditional and innovative funds approaching the development financing of enterprises. 

The management has indicated that investment targets are medium-size companies, with good ability to generate cash, but who have difficulty accessing the credit market. As a result, cases of companies under restructuring will be excluded. The management of Advam Partners SGR also added that the fund will not use tools of leverage. The first target is to raise €100 million on closing, extendable to € 200 million, while the first investments will be made by the end of 2013. To this end Advam Partners SGR aims to achieve a 5% return, net of subscription fees.

The fund will expire on December 2023 and sets a target of collecting € 200 million, to be subscribed within 24 months, but with the possibility of early termination at €30-50 million. The lure of the funds consists in a lump sum and there is the possibility of partial early repayments of the expiry of the fund.

For the evaluation of issuing companies on whom the fund may invest, the fund will use the model of Moody's Analytics for Italy, that has being used since 2005 and which  has been very reliable over the years, explaned VP Maurizio Belli to Milano-Finanza, who did also reveal the profile of issuing companies on which the fund could invest: "medium-sized companies with high payback capacity; €10-200 million revenue range, a net debt to EBITDA ratio between 3 and 5 and the characteristic of investment grade, i.e. with a default probability up to 0.66% . Should there be guarantees, for example of co-bank credits, the company could go down to a probability of default of 1.1%. Some companies are already 'in the advanced stage of selection. 

The asset management company has also mentioned a second fund, with up to €50 million endowment, for the Trentino Alto Adige region, in which Advam1 can invest in quality of fund of funds for instruments issued by companies of this region. At this, the CEO announced that "with regard to territorial funds we are making an in-depth analysis for a region of Southern and also one for the Central Italy."

Advam Partners SGR, which already has €120 million under management, is chaired by Danilo Mosca and led by the CEO Emanuele Facile, with Maurizio Belli and Luca Passoni as vice president and chief investment officer respectively.