Progressio launches new fund with €225m target

Amedeo Goria
27 March 2017

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Italian private equity house Progressio has launched its new vintage, Progressio Investimenti III, with a €225m target.

Progressio III is the fourth fund launched by Progressio. The GP expects to hold a first close on €120m by July 2017 and reach a final close on €225-250m by the end of the year.

According to a source close to the firm, the fund sticks to industry standards in terms of management fee (2%), hurdle (8%), and other terms and conditions. With a three-to-five-year lifespan, the managers aim for 2.5x returns from each portfolio company.

Cebile Capital is acting as adviser and placement agent for Progressio.

Currently, the GP manages €348m of assets across three vehicles. Since 2005 Progressio has made 19 investments and reaped an 80% gross IRR on 16 divestments, half of which were exited to trade players, the same source said.

Founded in 2005 as the private equity branch of listed merchant bank Mittel, the firm initially managed its maiden €43m vehicle, MPE, which generated a 7.1x multiple on invested capital (MOIC) and 93% IRR. Subsequently, the GP managed the second fund, Progressio I, a 2006-vintage vehicle that raised €100m and eventually returned 3.2x and a 54% IRR.

Following its own MBO in 2009, in which the management team acquired a 51% stake in the firm, Progressio launched its third vehicle, Progressio II, in 2010 before holding a final close on €205m in July 2011. The fund is expected to deliver its last investment in May 2017 and is currently deployed at 87%. At the time of publication the fund had generated a 2.0x MOIC and 69% DPI.

In 2015, the management team completed the purchase of the firm by acquiring the remaining stake.

Most recently, the GP sold Italian pharmaceutical company Italchimici alongside Idea Capital Funds for €130m in June 2016 and realised industrial machinery manufacturer Duplomatic Oleodinamica to Alcedo for €27m in March 2017.

Furthermore, the GP currently has five deals in the pipeline, unquote" understands.

Investors
The GP aims to raise commitments from a diversified mix of LPs, including institutional investors, banks and family offices. The managers expects to raise 70% of commitments from Italian LPs and the remaining 30% from European LPs.

LPs will be able to co-invest alongside the GP.

Investments
Progressio mainly targets primary buyouts across the Italian mid-market. It targets companies with revenues ranging within €20-150m and operating in the mechanical engineering, fashion and luxury, pharmaceutical, chemicals and food and beverage sectors.

People
Progressio - Filippo Gaggini (managing partner); Angelo Piero La Runa, Nino Mascellaro (partners); Alessandro D'Arco, Alessandro Petraccia (investment directors).