Italian GPs ask: Why Not Italy?

"Put simply, we have observed that there is concern regarding investing in Italy," says Fabio Sattin, coordinator of WNI, founding partner of Private Equity Partners and former chairman of EVCA. "We know investors and have credibility in their eyes, so we wanted to use our personal experience and image to work together alongside Bocconi University to provide structured information to explain what Italy offers for institutional investors. Of course without underestimating the problems."

Singing from the same hymn sheet
Current members of the 13-strong group include Investindustrial founder Andrea Bonomi, Clessidra founding partner Claudio Sposito, Alpha CEO and founding partner Edoardo Lanzavecchia and Ambienta founding partner Nino Tronchetti Provera.

Bridging the investor and academic community and coordinating research into Italian private equity are Professor Stefano Caselli, head of banking and finance at Bocconi University, and Dante Roscini of the Harvard Business School.

"We all have 20 years or more of fundraising experience and have each managed significant amounts of money from worldwide institutional investors for more than two decades," says Sattin. In a country where personal contacts are paramount, these private equity veterans are sure to pack a punch.

Setting the record straight
Promoting their message through sound research tops the group's agenda. "From our point of view, it is very strange that people confuse the Italian situation with Greece, where the GDP is so low," explains Sattin. "Our GDP is actually level to that of the UK, but not Greece. That is a very basic fact, but I think people forget it."

Further demarcating Italy from Southern European neighbours, WNI stresses that the nation reports no major bubbles in the housing market, low household debt and a relatively sound banking system that has not had to turn to state aid. The real Achilles heel of the boot-shaped peninsula is high public debt.

However, this high public debt could spell opportunity for investors as it has pushed the government towards privatisation of significant holdings or entire ownership of many large companies. WNI suggests that privatisation of municipally-owned firms could open up a lucrative space for private equity.

Similarly, the country's shortages could prove beneficial to investors. WNI highlights the absence of raw materials and resources to generate electrical energy as an opportunity to invest in clean tech. Indeed, unquote" data has recorded a steady increase in alternative energy investments in Italy since 2008, spiking in 2010, but falling in 2011. Perhaps it is set to pick up again.

As draconian austerity bites deeper into Italy, private equity could represent a much-needed source of growth. While the government has taken strides to promote venture and the public-private Fondo Italiano continues to back indigenous SMEs, the Italian private equity community has taken matters into its own hands, hoping to encourage investors to consider Italy. Why not?

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• Topics
• Southern Europe
• Industry
• Italy
• Investindustrial
• Clessidra Capital Partners
• Ambienta