Riello launches €80m agri-food venture fund

The fund, which invests across the agri-food sector, expects to reach a first close on €40m in the coming months. It will be managed by an independent team led by fund manager Marco Gaiani.

This new venture capital platform will complement Riello's private equity and private debt activity. The GP is currently investing its private equity vehicle Italian Strategy III, which targets majority and controlling minority stakes in Italian SMEs with enterprise values of €10-120m, operating in the fashion, food, automotive, furniture and cosmetics sectors. The vehicle deploys equity tickets in the €5-30m range in buyout transactions with moderate leverage – around 3-3.5x EBITDA.

The GP is also managing a private debt fund, Italia Private Debt II, which targets Italian mid-market companies and specialises in providing senior and junior loans, residual equity instruments and convertible bonds.

"We established our firm in the late 1990s as a private equity manager, but we soon realised, thanks to our deep knowledge of the Italian business industry, the importance of offering resources and managerial skills also through investments in private debt," said Nicola Riello, president of Riello Investimenti. "Today, with the decision to launch a venture capital fund, we are expanding our investment scope to younger, dynamic and fast-growing companies, with the aim of further contributing to the recovery of the Italian economy and offering our LPs new investment opportunities in high-quality assets."

Investors
The fund plans to build a large and diversified LP base composed of Italian and international institutional and corporate investors.

Investments
Linfa Ventures will acquire minority stakes in agri-food businesses via capital increases, with the aim of providing fresh financing to boost the development and expansion of high-growth companies.

The fund will invest in both late-stage businesses undergoing rapid expansion, and growth capital deals targeting SMEs with solid business models that need fresh capital and managerial support to accelerate their growth.

The vehicle intends to invest around 80% of its capital in Italy and the remainder in the rest of Europe.

"The innovation of the agri-food system represents a great investment opportunity in Italy," said Linfa Ventures manager Marco Gaiani, "and also an opportunity for innovation and regeneration for one of the pillars of the Italian economy, the food sector. The pandemic has brought a series of structural changes in consumer behaviour that will not disappear with the end of Covid, including the spread of digital platforms, the greater focus on the origin and supply chain of products, and the impact of food on individual health. Technological innovation in agriculture and the food industry are the answers to many challenges: from climate change and the reduction of our carbon footprint, to the decrease in consumption of proteins of animal origin."

People
Riello Investimenti Partners – Nicola Riello (president); Marco Gaiani (fund manager of Linfa Ventures).

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