Amundi Alpha Associates Head of Secondaries Serge Koniski is interviewed about insights and opportunities in Private Markets.
Privileged access to Private Markets
“Private Markets” refers to investments in assets or companies that aren't listed on a public stock exchange. It is referred to as “real economy” or “real assets”. Investing in Private Markets allows to participate in the financing of companies or projects through different asset classes, including Private Equity, Private Debt and Infrastructure.
Less linked to traditional stock markets, Private Markets carry distinctive characteristics in terms of performance and diversification. On the other hand, they are exposed to risks related to liquidity, valuation and capital loss.
Until recently, Private Markets were the preserve of institutional investors. The new European ELTIF1 regulation, aiming to boost long-term European investments in the real economy, facilitates access to these asset classes for retail investors.
With Amundi Private Markets ELTIF (Amundi PRIMA), retail investors2 can now also access this asset class through a regulated vehicle designed for long-term investment.
Fund Highlights
- Flexible multi-manager allocation in Private Markets with a balanced allocation between Private Equity, Private Debt, and Infrastructure
- Access to Private Markets through three different channels: primary funds, secondary transactions, and direct co-investments
- Investment focus on sectors contributing to transitions, specifically digital, environmental, territorial, and social transitions3
- Target net return (IRR): 8-10%4 p.a.
- Liquidity: monthly subscriptions and conditional quarterly redemption windows for investors5
- European regulation: an ELTIF 2.0, sub-fund of a Luxembourg SICAV UCI Part II umbrella fund6,
The target net return is not guaranteed.
Target Portfolio Composition
Within the Private Markets universe, the fund focuses on investments that promote the digital, environmental, societal and territorial transitions.
| WHAT TRANSITIONS? | EXAMPLES OF INVESTMENT OPPORTUNITIES6 |
|---|---|
| Territorial and digital transition |
|
| Ecological and digital transition |
|
| Societal and digital transition |
|
Investment Examples
Private markets offer unique opportunities to participate in innovative and sustainable business ideas. Here are a few case studies of underlying companies that the fund is indirectly invested in through external managers:
Fibre optic network operator
Leading French network operator responsible for five regional networks across France
Water pump manufacturer
Leading European manufacturer of pumps for construction, agriculture, industry, and municipalities
Ice cream manufacturer
Leading European manufacturer and distributor with a portfolio of branded and private label products
The companies mentioned are not investment recommendations, but examples provided for illustrative purposes only.
Key Benefits and Risks
Benefits for Investors
- Access to a multi-asset portfolio already invested through multiple investment channels and asset classes
- Contribution to major transitions (social, territorial, environmental or digital)
- Long-term investment that can be less sensitive to economic cycles
- Opportunity for diversification within traditional investment portfolio
Key Risks
Amundi Private Markets ELTIF is classified as a 4 out of 7 on the Summary Risk Indicator (SRI)7.
- Valuation risk: Private markets funds invest in companies that are not listed on the stock exchange. It may therefore be more difficult to determine the current value of the investments.
- Liquidity risk: There is no guarantee that a fund will be able to make investments at attractive prices or successfully execute a sales strategy.
- Credit risk: Where the value of an investment depends on a counterparty meeting a payment obligation, as is the case with loans, there is a risk that such an obligation will not be met.
- Risk of capital loss: Due to the nature of this investment vehicle, the investor is exposed to the risk of capital loss.
- Leverage risk: It can amplify the Fund’s exposure to market movements and magnify both gains and losses. Adverse market conditions may result in larger losses than in an unleveraged investment and may require the Fund to adjust positions at unfavourable prices. Leverage may also increase volatility, liquidity risk and the risk of total loss of capital.
Publications
Here you can find the latest Amundi publications on private markets:
Amundi - Investment Convictions Insights - Private Markets
Glossary
Private markets comprise assets that are not traded on public financial markets; they are illiquid and cover various market segments such as private equity, private debt, and investments in tangible assets like real estate and infrastructure.
Investing in unlisted companies allows exposure to sectors that are not accessible through traditional financial markets.
Investment in the equity of privately held companies at various stages of their development. It contrasts with public equity, which consists of investing in companies publicly traded on the stock market.
Private Debt refers to loans granted directly to mid-cap companies (ETIs and SMEs) without resorting to traditional bank financing or the issue of bonds on public financial markets.
Article: Private Debt at a Turning Point: Risks and Opportunities as the Industry Scales up
In economic terms, the set of basic facilities the community needs to enable production and consumption: water supply, electricity, telephone, wastewater disposal networks, roads, ports, etc.
Investing in several managers/funds rather than allocating all capital to a single GP; aims to achieve diversification by manager, vintage, strategy and geography.
The acronym ELTIF stands for “European Long-Term Investment Funds”. These alternative investment funds were introduced within the EU in 2015 to promote “smart, sustainable and inclusive economic growth”8 by financing the European real economy. ELTIFs were designed primarily to support long-term investments in major projects and tangible assets. They are intended to provide private equity or private debt financing for small and medium-sized enterprises.
The ELTIF 2.0 revision removed the minimum ticket size and allows indirect investments through funds, introducing enhanced flexibility and opening new opportunities to access private markets.
Private Markets funds can be accessed through evergreen funds - open-ended investment products with undetermined lifespan. Unlike traditional closed-end private equity funds, which have long terms and very limited liquidity, evergreen funds are designed around the specific needs of retail investors, with features such as:
- No fixed maturity date
- The possibility of regular subscriptions and, under certain conditions, redemptions
- Low minimum investment amounts
- Raised capital can be deployed immediately, with proceeds reinvested into new opportunities
FAQ
The new ELTIF 2.0 regulation has significantly improved the conditions for retail investors to invest in private markets:
- Greater flexibility
- No or lower minimum investment amounts, no upper investment limit
- Ability to invest indirectly via funds
- Increased investor protection
- Possible redemption windows for open-ended ELTIFs (evergreen funds)
Private market portfolios offer an attractive proposition for investors looking to diversify their long-term portfolio across asset classes with different characteristics.
Investors for whom sustainability is important, and who want to support the digital and environmental transition towards a climate- and socially responsible economy, will also find this a promising asset class:
- Potential higher return
- Low correlation to public market sentiment Long-term portfolio diversification
- Tangible investments
- A broad range of potential investments and sectors
Investments in private markets are exposed to risks, including valuation, liquidity and capital loss risks. However, retail investors should have a long-term horizon, sufficient financial resources, a good understanding of investments, and a certain capacity to bear risk. Private Markets funds are complex investment products with limited liquidity compared with traditional funds, and they are therefore not suitable for short-term speculation. For the Amundi Private Markets ELTIF, we recommend a holding period of at least five years.
The multi-manager approach can provide access to a selection of high-quality fund investments at a level of increased diversification (in terms of assets, sectors, geographies, etc).
Units in the Amundi Private Markets ELTIF can be purchased via external distribution platforms. Conditions apply and can change depending on the distribution platform.
One characteristic of private markets is that the capital invested is tied up for the long term. However, evergreen funds offer redemptions at regular intervals, subject to certain conditions.
Amundi PRIMA allows for quarterly redemption windows, under specific conditions:
Redemptions are subject to two conditions, both of which must be met: the total amount of redemptions on each redemption date (once per quarter) is limited to:
- a maximum of 5% of the portfolio’s total assets, and
- a maximum of 50% of the total available liquid assets
Amundi PRIMA invests in long-term illiquid assets, which are not valued on a daily basis. The NAV is recalculated and published monthly. The NAV then serves as the basis for monthly subscriptions and for redemptions at the end of each quarter, subject to the notice period. The current NAV can be found on the fund’s global distributor page.
Fund Details & Documents
Here you can find all the information and latest publications relating to Amundi Private Markets ELTIF
Important note: The risk indicator is based on the assumption that the investor will hold the product for the recommended holding period. Further information on the risk indicator can be found in the key information document for the relevant investment product.
[1] European Long-Term Investment Fund Regulation (EU) 2023/606.
[2] This fund is intended for informed investors who have acknowledged and understood the risks associated with the fund. Please refer to the fund’s legal documentation for an exhaustive list of such risks.
[3] The reference to transitions is indicative of the Fund’s investment focus and does not imply a binding ESG, sustainability or impact target. The Fund applies a proprietary ESG framework combining exclusions, ESG integration, engagement and voting. Investments rated G are excluded, and minimum ESG criteria apply to underlying funds and managers.
[4] IRR (Internal Rate of Return) is the annualized rate of return that makes the net present value of an investment equal to zero. The target return is based on normal market conditions. The target is not a reliable indicator of future performance. Targets can be exceeded or undershot and should not be construed as an assurance or guarantee. Please refer to the KID for 5-year scenarios: stress (example of share A): -7.18% / unfavourable: 0.53% / moderate: 8.12% / favourable: 9.94%.
[5] Redemptions are subject to cumulative conditions at each NAV: max. 5% of NAV and 50% of available liquid assets. Redemption requests must be submitted before 2:00 p.m. CET on the valuation date preceding the end of the quarter. Please refer to the fund’s prospectus for more complete information.
[6] SICAV: Investment company with variable capital (French: Société d'Investissement à Capital Variable).
[7] The Summary Risk Indicator (SRI), used in the PRIIPs KID, ranges from 1 (lowest risk) to 7 (highest risk) and reflects the overall risk level of the product.
[8] REGULATION (EU) 2023/606 OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL of 15 March 2023
Important Information
This is a marketing communication. Please refer to the prospectus / information document and to the KID before making any final investment decisions.
This document contains information about AMUNDI PRIVATE MARKETS ELTIF (the “Sub-Fund”), a sub-fund of PI Solutions SICAV (the “Fund”). The Fund is an investment company incorporated under the laws of Luxembourg as a Société d’Investissement à Capital Variable (investment company with variable share capital) in accordance with the provisions of Part II of the Law of 17 December 2010. The Management Company of the Fund is Amundi Luxembourg S.A., 5, allée Scheffer, L-2520 Luxembourg. The Sub-Fund qualifies as a European Long-Term investment Fund (ELTIF) and is classified as an alternative investment fund for regulatory purposes.
This material is for information purposes only, is not a recommendation, financial analysis or advice, and does not constitute a solicitation, invitation or offer to purchase or sell any the Funds or services described herein in any jurisdiction where such offer, solicitation or invitation would be unlawful. The information contained in this document is confidential and shall not, without prior written approval of Amundi, be copied, reproduced, modified, or distributed, to any third person or entity in any country.
The information contained in this document must not be considered to be a general investment recommendation within the meaning of the regulations. It has not been prepared in accordance with the regulatory provisions that govern the independence of financial analysis and, as such is not subject to any prohibition on carrying out transactions on the financial instruments covered by this document.
Not all share/unit classes described in this document may be available to all investors and they may not be registered for public distribution with the relevant authorities in all countries. In jurisdictions other than those where the share/unit classes are registered for public distribution, this document is for the sole use of the professional clients and intermediaries to whom it is addressed. It is not to be distributed to the public or to other third parties and the use of the information provided by anyone other than the addressee is not authorised.
This information is not for distribution and does not constitute an offer to sell or the solicitation of any offer to buy any securities or services in the United States or in any of its territories or possessions subject to its jurisdiction to or for the benefit of any U.S. Person (as defined in the prospectus of the Funds). The Funds have not been registered in the United States under the Investment Company Act of 1940 and units of the Funds are not registered in the United States under the Securities Act of 1933.
Investment involves risk. Past performance is not a guarantee or indication of future results. Investment return and the principal value of an investment in the Funds or other investment product may go up or down and may result in the loss of the amount originally invested. The specific risks linked to the investments in the Sub-Fund can be found in the “Specific Risks” Section of the prospectus of the Sub-Fund. An ELTIF is an illiquid investment. All investors should seek professional advice prior to any investment decision, in order to determine the risks associated with the investment and its suitability. It is the responsibility of investors to read the legal documents in force in particular the current prospectus for each Fund. Subscriptions in the Funds will only be accepted on the basis of their latest prospectus in English or in the local language of EU registration and/or the Key Investor Information Document, as applicable, ( “KID”, available in local language in EU countries of registration) which, together with the latest annual and semi-annual reports may be obtained, free of charge, at the registered office of Amundi Luxembourg S.A. or at www.amundi.lu.
Information on sustainability-related aspects can be found at https://www.amundi.com/institutional/responsible-investment-policies-reports.
Please note that the management company may de-notify arrangements made for marketing as regards units or shares of the Fund in a Member State of the EU in respect of which it has made a notification.
A summary of information about investors’ rights and collective redress mechanisms can be found in English on the regulatory page at https://about.amundi.com/legal-documentation.
Investors in this Sub-Fund should also take not that:
- The Sub-Fund has a ninety-nine year life as from its authorisation date which may be extended by up to another one year however, the Sub-Fund will terminate, on the date on which the last asset of the Sub-Fund is extinguished, abandoned, written off or sold.
- The Sub-Fund is illiquid in nature because its investments are long-term, this is an investment that has low liquidity. The Sub-Fund may not be suitable for Retail Investors that are unable to sustain such a long-term and illiquid commitment. A 5-year holding period is recommended.
- In cases where redemption requests may not be satisfied, the investor may face a longer holding period than initially planned to be invested in.
- The Sub-Fund is subject to the Amended ELTIF Regulation as amended and implemented from time to time.
- The Sub-Fund is intended to be marketed to Professional Investors and Retail Investors that are eligible investors under the Amended ELTIF Regulation.
- The Sub-Fund may accept subscriptions during the life of the Sub-Fund.
- Investors shall have the right to redeem their Shares in the Sub-Fund before the end of the life of the Sub-Fund only in accordance with the provisions set out under section “Redemptions” in the supplement. Investors may freely transfer their Shares to third parties meeting the Sub-Fund’s eligibility criteria.
- The Sub-Fund intends to use leverage in accordance with the provisions set out under section “Borrowings and leverage” in the supplement. When used, this leverage will proportionately increase gains or losses made by the Sub-Fund.
- All investors benefit from equal treatment and no preferential treatment nor specific economic benefits are granted to individual investors or groups of investors.
- Investors shall have no obligation to make contributions to the Sub-Fund in excess of their respective subscription amount.
- Investors should ensure that only a small proportion of their overall investment portfolio should be invested in an ELTIF such as the Sub-Fund, as further described under section “Eligible Investors” in the supplement.
- Financial derivative instruments shall only be used for hedging risks arising from exposures to eligible assets under the Amended ELTIF Regulation.
- The specific risks linked to investments in the Sub-Fund are set out under section “Specific Risks” in the prospectus.
This material is based on sources that Amundi considers to be reliable at the time of publication. Data, opinions and analysis may be changed without notice. Amundi accepts no liability whatsoever, whether direct or indirect, that may arise from the use of information contained in this material. Amundi can in no way be held responsible for any decision or investment made on the basis of information contained in this material.
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