Italian funds outweigh deal flow?

Italian private equity players are struggling to find sufficient opportunities to invest their funds, according to the Italian venture capital association, AIFI, which has unveiled preliminary figures for the first six months of 2001. Private equity and venture capital investments in Italy fell by 20 per cent to e1.1 billion.

The greatest reduction was experienced in high tech venture capital investments, while the private equity sector is expected to fare better, with more buyout opportunities presenting themselves in the second semester of the year, says Roberto del Guidice of the association.

Half of AIFI members predict that the Italian private equity market will remain stable in 2001 while 77 per cent anticipate a decrease in the venture capital market. In terms of returns on investment, 73 per cent of members are expecting a worse performance in 2001 than in 2000.

Number of investments were down by 24 per cent to 220 deals, and yet the number of investors in the Italian marketplace continues to grow, making for an overcrowded space in which funds are abundant and deals are scarce. AIFI currently has 85 members, with 15 new additions since December. Most of these new players, says Del Guidice, are in the midst of the fund raising process.

AIFI figures for the first six months of 2001 will be available from October.