Impact investment delivers new credit source for European SMEs

Some European mid-caps and SMEs will have access to a new €150 million funding source.

Launched by the European Investment Fund (EIF), Cassa Depositi e Prestiti (CDP), contributing €50 million and €100 million respectively, and Muzinich, the Muzinich Diversified Loans Fund II builds on the success of Muzinich’s Diversified Lending Fund, in which EIF and CDP were cornerstone investors.

The European-wide fund is based on parallel lending, an alternative finance instrument to the banking channel, which aims to raise €1 billion to support development plans and access to credit for SMEs and mid caps affected by the impacts of the pandemic. Italy will see at least €200 million invested locally, equal to double the resources made available by CDP.

“SMEs are key to foster innovation, growth and employment, and the European Guarantee Fund was designed to provide these companies with the funds needed to overcome the economic crisis caused by the pandemic,” said Alain Godard, chief executive of the EIF.

Filomena Cocco, president of Muzinich & Co. SGR, added: “Since the end of 2018, the first fund has completed more than 80 transactions, without default and without payment holidays. We have been investing in corporate credit for more than 30 years and have always relied on deep fundamental analysis to select our investments.”