CACEIS and its Private Equity Real Estate Solutions (PERES) business line form part of the Crédit Agricole Private Capital Services* specialised division. This division provides support for private equity, real estate and infrastructure professionals, who nowadays involve their banking partners in their ESG commitment and initiatives. Olivia Zitouni, newly-appointed group manager for CACEIS' PERES clients, explains how and to what extent ESG criteria have become essential in the services offered.
HOW HAS THE ACTIVITY OF YOUR BUSINESS LINE CHANGED IN RECENT YEARS?
CACEIS provides support to private equity, real estate, infrastructure and private debt professionals with a dedicated range of services, including depositary bank and custody, fund administration, middle office, and investor registrar services. With a client base of over 2,800 fund structures representing €320 billion in deposited assets, CACEIS is a major European player.
For more than five years, we have combined our expertise with that of Crédit Agricole Group entities: its corporate and investment bank (Crédit Agricole CIB), its network of regional banks, its retail bank (LCL) and its subsidiary dedicated to wealth management, Indosuez Wealth Management. The aim is to offer clients complete, innovative solutions, especially for ESG issues.
HOW WOULD YOU EXPLAIN THE MAJOR EXPANSION OF ESG CRITERIA IN YOUR BUSINESS LINE?
This development is part of a broader trend towards sustainable finance in the private markets. Asset management companies that in the past communicated chiefly with their investors on their ESG initiatives now involve all stakeholders, and in particular their banks, in order to make headway on these issues.
This is how financing, including a margin bonus/malus system conditional on the achievement of ESG objectives, plays a key role in bringing asset management in line with the United Nations’ Sustainable Development Goals. Measurable and relevant performance indicators provide a transparency that has become essential.
COULD YOU GIVE US SOME SPECIFIC EXAMPLES OF ACTIVITIES AND PRODUCTS THAT YOU OFFER?
Crédit Agricole Group is a leading player in the structuring of transactions that incorporate extra-financial criteria. As Stéphane Barret, head of Crédit Agricole Private Capital Services at Crédit Agricole CIB, points out: “Our world-reputed expertise in green finance and our CSR strategy are the cornerstones of growth with asset management companies.”
Olivia Zitouni explained: “We enable our clients to set up equity bridge financing linked to ESG criteria, a service provided in close collaboration with Crédit Agricole CIB and LCL. Demand for this type of product is very strong, with 30% of our new originations at CACEIS currently linked to extra-financial criteria.”
Crédit Agricole CIB has signed for more than €2 billion in ESG equity bridge facilities. Its LBO financing teams have conducted about 10 ESG Advisor mandates since the beginning of the year.
In July 2021, Crédit Agricole Group provided support for bringing the first green LBO to the French market, in line with the European taxonomy and the Green Loan Principles published by the Loan Market Association.
Another example in the mid-cap market: Crédit Agricole CIB, LCL and Caisse Régionale Centre Est have structured an ESG-indexed equity bridge financing for Siparex. LCL, which is a leader in SMID LBOs in France, has also set up a team of six people dedicated exclusively to ESG financing for SME/intermediate-sized clients, as well as for French small and mid-cap funds.
WHAT’S YOUR DEVELOPMENT OUTLOOK AT CACEIS?
Asset management companies make strong ESG commitments and are keen to surround themselves with service providers who share this level of commitment. CACEIS is a preferred partner for the asset management companies leading the way in ESG and impact investment.
CACEIS’ CSR policy is based on three pillars: supporting our clients in complete confidence and security, promoting the energy and environmental transition and being a responsible and committed employer. CACEIS was awarded the Platinum label in 2020 by CSR performance rating platform, EcoVadis, and thus joined the top 1% of the best rated companies in its sector out of the 60,000 evaluated.
The success of our approach is reflected in the satisfaction expressed by clients in surveys over the last two years.
Recent successes with pan-European asset management companies whose funds exceed several billion euros and include these extra-financial criteria are a testament to the merits of our approach. We also expect a large proportion of our equity bridge financing to be ESG-linked within two to three years.
So in view of these parameters, we have every confidence in the future.
*Crédit Agricole Private Capital Services combines the expertise of Crédit Agricole CIB, CACEIS, Indosuez Wealth Management, Amundi Real Assets, Crédit Agricole Leasing & Factoring, LCL, and Sodica Corporate Finance.