Banca Promos launches Promo Equity Sud

01 March 2008

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Fund

Naples-based Banca Promos has launched Promo Equity Sud fund. Still in fundraising stage, it has a target of EUR50m. The vehicle has a lifespan of seven years. Management fees are set at 2.65% of the total amount subscribed with a 15% carry on profits generated by capital gains. The depository bank will charge a 0.1% fee.

All payments in arrears will be called back in three years, irrespective of the investment opportunities chosen at that time. The three years call back payment period will begin with the initial subscription. Subscribers endorse shares in more tranches according to the fund's needs, paying a minimum 10% of the commitment by the first call back.

Investors

The fund has a EUR30m floor; professional/institutional investors will be allowed in with a minimum subscription of EUR500,000 while the minimum subscription for high-net-worth individuals is set at EUR100,000.

Class A shares will be subscribed by individuals and private corporations with enough experience and knowledge in the field. Class B shares are reserved for banks, investment companies, pension funds, insurance companies and to all potential investors allowed by Italian law according to the Italian Bank Act. Class C shares are reserved for the management.

Investments

The average size of each investment will be up to EUR2.5m with no investment exceeding 15% of the subscribed fund's shares. No capital will be invested in other funds or in other kinds of collective investments. Available tax advantages and exemptions will be exploited to maximize the profits.

The number of deals will follow the opportunities identified during the scouting process. The fund foresees investing in 10-20 enterprises in a seven-year investment phase.

The vehicle will focus on Southern Italy aiming to target innovation or internationalisation projects. The fund's investment strategy will research investment opportunities in SMEs where the equity provided may foster their growth processes (hands-on); where the brand is already well known locally and where the equity provided by the fund may lead the brand to become even more successful.

The investments will be carried out through the acquisition of equity shares, bonds, warrants and convertible bonds and other financial instruments. There is a small provision to invest in corporate bonds in order to normalise the fund's annual returns, providing additional liquidity through a secondary income stream.

People

The fund is managed by Mario Mustilli co-founder and director of Studi Finanziari consulting company, formerly director of Sviluppo Italia; Ugo Malasomma founder and president of the board of directors of Banca Promos; Francesco Gangi co-founder and senior partner of Studi Finanziari who has also served as director and internal auditor for financial and non-financial companies; and Umberto De Gregorio a chartered accountant and auditor, who serves as board director and auditor for several companies operating in different sectors (industrial, services, health and financial). They will be supported by Piero Abbate manager of two venture capital funds investing in high-tech enterprises in Europe and the US, and Aurelio Matrone formerly an executive for Mediobanca and as a senior analyst for Vitale & Associates.

Name

Promos Equity Sud

Target

EUR50m

Launched

January 2008

Focus

Southern Italy, generalist.