The French government, two local banking groups and Paris-based investment firm Tikehau Capital have formed FrenchFood Capital, a fund that will aim to back agri-food companies in the country with sales of up to EUR1.5bn (US$1.72bn).

FrenchFood Capital is targeting small and medium enterprises, as well as companies dubbed ETIs in France – a class of business between SMEs and large companies – across food, distribution, retail, foodservice and “novel foods”.

The entities behind the fund – state investment fund Bpifrance, the banks Crédit Mutuel Arkéa and Banque Populaire Rives de Paris, plus Tikehau Capital – are looking to raise EUR100m by the end of the year. They have already grouped together EUR70m between themselves and other investors in the agri-food sector.

In a statement, the principal backers said SMEs account for “nearly 98%” of France’s agri-food industry but “account for only 43% of the sector’s total turnover and only 33% of exports”.

“With this in mind, FrenchFood Capital wishes to support their development in France and internationally to encourage the emergence of French food champions,” the statement read.

“In addition to acquiring a stake in the capital of these companies, the fund will provide them with a real operational know-how to help them grow, thanks to the experience of its founders, who all have an entrepreneurial profile [and] strong expertise in food and also an extensive sectoral network among its investors.”

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By GlobalData

The fund will be managed by four professionals in food and development: Paul Moutinho, Perrine Bismuth, Alain Ducasse Entreprise founder Laurent Plantier and ex-McDonald’s executive Denis Hennequin.