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The EIF backs Santander Asset Management’s Alternative Leasing fund

  •  
    Date: 27 April 2021
  • This product, managed by the Illiquid Alternatives team, is a Direct Lending fund that finances companies with leasing facilities on new or existing industrial equipment and machinery.
  • In November, Banco Santander announced that it would invest up to €20 million in the fund from its own balance sheet.
  • The EIF, thanks to the support of the Private Credit Tailored for SMEs Programme of the European Fund for Strategic Investments (EFSI), participates in the fund with €50 million to facilitate fundraising among private investors.

The European Investment Fund (EIF) will support the new Alternative Leasing fund managed by Santander Asset Management. As part of the Private Credit Tailored for the SMEs Programme of the European Fund for Strategic Investments (EFSI), part of the EU’s Investment Plan for Europe, the EIF will invest €50 million in the fund, on top of the €20 million invested by Santander from own resources.

Alternative Leasing was launched in October as an investment fund providing new long-term financing for SMEs and small mid-caps, predominantly in Spain, but to a lower extent also in Portugal. The target size will be up to €300 million, targeting a minimum 80% exposure in financing through sale and leaseback agreements on core industrial machinery and equipment  on companies' balance sheets and considered critical to businesses.

Alternative Leasing is managed by Santander Asset Management’s illiquid alternative asset team, headed by Borja Díaz-Llanos, alongside with Gonzalo Colino (portfolio manager), Pedro Martín (senior analyst) and Jesús Portomarín (risk). The Fund targets around 50 investments, with a maximum maturity of eight years and a target average size of between 10 and 15 million. The objective is to achieve a net, non-guaranteed return of more than 5% by investing in any sector, except for sectors with reputational or environmental risk.

The Illiquid Investments division, launched at the end of 2019, offers alternative assets to complement investors’ portfolios, such as private debt, trade finance, or infrastructure funds, in a low-interest-rate environment. Most of these investment solutions mainly focus on credit assets and are designed in close collaboration with Santander Corporate & Investment Banking, taking advantage of Banco Santander’s leadership in the origination of infrastructure debt, trade finance, financing for SMEs, and targeting institutional investors such as pension funds, insurance companies, sovereign funds, corporations and family offices.

The EIF seeks to support Santander Asset Management to foster more private capital towards the lower end of the market and play a catalytic effect in attracting new investors looking for opportunities in the asset-based lending space.

This €20 million investment from Banco Santander will combine with another investment (of up to €280 million) in a parallel compartment of the same fund with a wider geographical scope that includes Benelux, France, and other markets in Europe. The two compartments will be co-investing in Spain and Portugal, proportionally to respective compartment size.

Mariano Belinky, Global CEO of Santander Asset Management: "With this investment fund, Santander is adding to its usual new machinery leasing business and expanding the various initiatives it promotes to offer companies financing alternatives to loans in these challenging times. We are delighted by the support the EIF is showing with its investment in this fund. Banco Santander is one of the world's largest private debt originators. Santander Asset Management offers its clients the chance to invest in a product that acts as a bridge between loan origination, with access to an alternative to traditional investment formulas".

Alain Godard, EIF Chief Executive, also added: We are proud to back Santander’s Alternative Leasing, supporting companies seeking medium to long term financing, with flexible and tailor-made financing conditions. The Fund will provide companies with an alternative source of financing, which is key to overcome the current crisis posed by the pandemic.

European Commissioner for the Economy, Paolo Gentiloni, said: “The pandemic has shown that businesses need appropriate financing solutions to withstand crisis situations and restart economic activity. With this programme, the EU is supporting alternative sources of financing and diversification in the European capital and lending markets, ensuring a broader choice for businesses in Spain and Portugal.”

Background information:

The European Investment Fund (EIF) is part of the European Investment Bank Group. Its central mission is to support Europe's micro, small and medium-sized businesses (SMEs) by helping them to access finance. EIF designs and develops venture and growth capital, guarantees, and microfinance instruments that specifically target this market segment. In this role, EIF fosters EU objectives in support of innovation, research, and development, entrepreneurship, growth, and employment.

EFSI Private Credit Tailored for SMEs Programme

The European Fund for Strategic Investments (EFSI) has been the central pillar of EU financing and investment support and was significantly redirected in 2020 to support EU businesses impacted by the Covid-19 crisis. The projects and agreements approved for financing under the arm of EFSI implemented through the EIF are so far expected to mobilise almost €232 billion in investments and support more than 1.4  million start-ups, SMEs, and mid-caps across all EU Member States. The Private Credit Programme under EFSI makes cornerstone investments in funds that provide alternative, flexible and tailor-made debt financing for businesses.

Santander Asset Management is a global asset management company with strong local roots in Europe and Latin America. With 48 years of history and a presence in 10 countries, it manages €181 billion across all types of investment vehicles, from investment funds and pension plans to institutional mandates and alternative investments. Santander Asset Management's investment solutions include bespoke Latin American and European fixed-income and equities mandates.

Santander Asset Management has over 775 employees worldwide, of whom 230 are investment professionals, with over a decade of experience in the world of asset management. Its investment process, the analytical capabilities of its local teams and strict risk control facilitate an in-depth knowledge of market opportunities as well as the varying needs of its customers, and are a distinguishing feature of Santander Asset Management. Figures as of 30 December 2020.

Press contacts:

EIF:

Lorenzo Squintani, tel.: +352 691 285 772, l.squintani@eib.org
Website: www.eif.org – Press office: +352 4379 21000 – press@eib.org
Follow us on Twitter @eif_eu 

European Commission:

Flora Matthaes, tel.: +32 460 755148, flora.matthaes@ec.europa.eu

Santander

Ana Perona Esteso. Tel: 615901701. ana.perona@santanderam.com
Tatiana Nogueras Sarachaga. Tel: 615902525.
tatiana.nogueras@santanderam.com

 

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