Fund-of-funds make Italian debut

Earlier this year Mediolanum State Street SGRpA unveiled the first Italian private equity fund-of-funds focusing the majority of its activity in Italy. Fondamenta raised euro160 million at its first close. With a duration of ten years, the fund is registered in Italy and is authorised by the Banca d’Italia with Banca Commerciale Italiana acting as custodian. It has taken over a year to authorise the investment vehicle. In addition to State Street Global Advisors and Mediolanum Vita, institutional investors that have committed to the fund to date include Fondazione Cariplo; Fondazione Cariverona and Cassa Forense.

Fondamenta has a fund structure that invests 60 per cent to 70 per cent in Italian private equity funds and 30 per cent to 40 per cent in Italian co-investments, mainly in small-medium sized companies. Giuseppe Campanella, Fondamenta chief investment officer said, that as a pioneer in this market, Fondamenta hopes to play a positive role in setting the best standards and framework for investors.

Mediolanum State Street has a joint venture with Dupont Capital Management and is co-managing its pension fund in the US. Campanella recently spent a week training with the team in the US gaining experience that is he is now applying to the embryonic Fondamenta. He says Fondamenta will be playing an active role in structuring the funds in its portfolio.

The fund has already made commitments of around e34 million to Italian funds Arca Impresa and Emerald, which are generalist funds with a focus on expansion capital; Convergenza, which specialises in the media sector; and Opera, an Italian lifestyle fund targeting the luxury goods and fashion industries.

It is hoped the fund will attract mega international funds such as Apax. “Many of these funds do not know where to put their money when investing in the Italian market,” says Campanella. “With Fondamenta, they will get up-to-date information on the Italian market and an introduction to the best funds in order to work out a co-investment.”

Looking to the future, if the fund structure is a success, the idea is to duplicate Fondamenta in the Iberian market.