GP Profile: Consilium Private Equity

Italian private equity firm Consilium was established in 2006 by founding partners Stefano Iamoni and Antonio Glorioso as a spinout from Kairos Partners.

The firm focuses on investments in Italian mid-market companies with high-growth potential and ambitious expansion plans, and provides them with resources and expertise to support their growth and consolidation.

The GP has recently launched its fourth buyout fund, Consilium Private Equity Fund IV, with a €100m target. Initially, the firm had planned to launch a €200m fund, but, following the coronavirus outbreak, decided to reduce the target to €100m. The vehicle has already held a first close and expects to ink its first deal in the coming weeks. It plans to hit its target in a final close in 2021.

"The coronavirus pandemic has impacted PE portfolios worldwide while making fundraising more arduous," Stefano Iamoni, founding partner of Consilium, told Unquote. "This is why we decided to launch a smaller vehicle than initially planned, which will be raised more quickly and will be able to support a small number of attractive Italian SMEs. Subsequently, once the crisis is over, we will focus on a new larger fund. In the meantime, we have already identified several interesting investment opportunities for our fourth fund, targeting companies that have proven resilient to the crisis and with high-growth potential."

The fund plans to build a diversified investor base composed of local family offices and institutional investors, such as Italian pension funds, European funds-of-funds and public institutions. It will probably include Fondo Italiano d'Investimento (FII) and the European Investment Fund (EIF), which have both backed Consilium's previous vehicles.

Iamoni said: "We have a strong pool of loyal investors – primarily family offices and high-net-worth individuals – that have invested in our funds since inception. In addition, we expect to attract institutional investors both domestically and abroad, as we did with previous fundraisings."

The vehicle has already raised capital for a first close, primarily from Italian pension funds, and expects to hold a rapid fundraising concentrated primarily in the first quarter of 2021.

Investment strategy
Consilium Private Equity Fund IV intends to make five investments in Italian mid-market companies with enterprise values in the €40-80m bracket and generating EBITDA of €5-20m.

The fund has a generalist approach, with a special focus on the food and beverage, fashion, mechanical engineering and automation sectors. It targets majority stakes in buyout acquisitions of family-held private companies.

The vehicle will deploy equity tickets in the €15-20m range. "Despite the smaller size of our new fund, we will continue to provide the same equity tickets that we have deployed before, with our larger third fund," said Iamoni. "We intend to target the same segment of the Italian market, which is the most attractive and dynamic, is very fast-growing and is the richest in opportunities."

The fund will make its first investment in the coming weeks, acquiring an Italian company that operates in a niche of the music industry.

Portfolio management
Consilium is managing the portfolio of its third fund, Consilium Private Equity Fund III, a €145m fund that is now around 90% deployed across seven companies.

"Most of our companies have outperformed during the crisis, increasing their sales and surpassing our post-Covid revised forecasts," said Iamoni. "Others, including machinery manufacturers GMM and Faccin, have been mildly affected, but have already shown strong signs of a quick recovery."

He added: "We have recorded a more significant decrease in revenues across the retail sector, where we own some valuable assets, such as Manifattura Riese and Macron. However, Macron was able to rapidly refocus its activity and began to distribute personal protection equipment, generating substantial revenues."

Macron is a sportswear specialist, while Manifattura Riese is a clothing company that sells its product under the brand Navigare. Consilium, which acquired Manifattura Riese in January 2015, is considering an offer and might exit the company by the end of the year. However, the current scenario is not ideal for an exit strategy, and the GP might decide to wait until next year.

Consilium's third fund has a significant presence in the food sector, where it owns baked goods maker Dino Corsini, which specialises in the production of cakes and muffins. The company has recently signed a partnership with Ferrero and expects to increase its revenues by 13% in 2020.

The fund also owns a stake in frozen meals producer Gelit, which Consilium acquired alongside Progressio from NYSE-listed business Conagra Brands in May 2019. The company recorded a strong performance during the coronavirus pandemic, despite a temporary shutdown, reaching turnover of €57m.

The vehicle follows a dynamic buy-and-build approach to consolidate the market position of its portfolio companies, and is currently close to signing a bolt-on for sneakers specialist Gruppo Manifatture Italiane (GMI). This is a buy-and-build platform currently composed of River and Calzaturificio Energy, which were acquired by the GP in January 2018, and Calzaturificio Claudia, which was bought in October 2019. Following this new add-on, the combined group expects to generate revenues of €75m in 2020.

"In the coming months, we plan to carefully evaluate new investment opportunities. We will also continue to work on add-ons, consolidation and strategic acquisitions," said Iamoni. "The market environment that has emerged after the coronavirus outbreak is particularly favourable to a buy-and-build strategy. Promising companies that need some business development can be acquired at interesting valuations and become valuable resources for a build-up project."

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