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Sienna Investment Managers
In response to the current geopolitical backdrop calling for a massive financing effort in support of European sovereignty, Sienna Investment Managers, a pan-European asset manager, has just launched a European private credit financing strategy, Sienna Hephaistos, in reference to Hephaestus, the Greek god of blacksmiths.

The strategy and its corresponding fund vehicle will support European small and medium-sized enterprises (SMEs) and mid-caps in the defence sector, the firm said in a statement. It aims to raise between €500 million ($544 million) and €1 billion from investors mainly in Europe.

With defence and security underrepresented in many portfolios, WisdomTree has also just launched an exchange-traded fund: The WisdomTree Europe Defence UCITS ETF (WDEF), listed on Börse Xetra, Borsa Italiana and the London Stock Exchange.

In the context of a challenging, fragmented supply chain structure, suppliers to Europe’s major industrial groups are facing increased financing needs in order to keep up with the recent uptick in production. Sienna IM said it provides a secure source of financing tailored to the specific needs of defence SMEs and mid-caps, for example for modernising their production lines, accelerating their production, and funding external or organic growth projects, with a strong focus on France, Italy, and Germany.

Classified as Article 8 under the EU’s Sustainable Finance Disclosure Regulation (SFDR) regulation, the Sienna Hephaistos private credit financing strategy will include incentives for borrowers linked to pre-defined sustainable KPIs. It will not support activities prohibited by international treaties signed by France and Italy, the firm added. Sienna IM’s investment management team is working on identifying projects to enable the rapid deployment of this strategy.

As such, Sienna IM offers institutional investors access to a diversified private credit portfolio made of secured financing granted to companies that are essential to the implementation of defence programmes, which are set to grow over the coming years. 

“Sienna Hephaistos serves as an impactful bridge between, on the one hand, investors conscious of the acute challenges facing Europe and, on the other, industrial SMEs and mid-caps in the defence sector that are experiencing a sustainable increase in their order books,” Laurent Dubois, managing director – private credit, Sienna IM, said.