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Slow down in Italian investments

Italian funds raised and invested were both down in 2001 in spite of an increase in private equity players in the region. Figures from the Italian Private Equity Association, AIFI record the first slowdown in the Italian market for a decade.

AIFI president, Marco Vitale said: “The decrease shown by the survey is to be considered in the general downturn of the global economy. However, this difficult period is going to be overcome, taking into consideration that the number of players is increasing and that the market is signaling a positive recovery.”

In 2001, funds invested totalled EURO2.185 million, down 26 per cent on 2000. The number of deals was also down, falling 24 per cent from 646 transactions in 2000 to 489 last year. Start-ups were hit hardest down by 46 per cent by value and 35 per cent by volume.

Fund raising figures also reveal a decline of 36 per cent to EURO1.875 million in 2001. This does not take into account pan-European fundraising activity in Italy.

AIFI’s general manager, Anna Gervasoni stressed that in 2001 players had been focusing on their portfolio companies rather than looking for new opportunities. This was highlighted by the fact that for the first time ever, the number of follow-on investments (57 per cent) exceeded first round investments (43 per cent).

The lion’s share of investments is taken by buyouts with 47 per cent of the total at just over EURO1 billion. This was followed by expansion with 34 per cent, start-up with 13 per cent and replacement with 6 per cent. In terms of number, start-ups retain the top spot with a 45 per cent share with EURO291 million invested in 222 transactions.

Looking at divestments, in 2001 149 deals were completed, down by 20 per cent on 2000. However, by value total divestments amounted to EURO910 million, up 96 per cent on 2000. Trade sale was the most popular exit route, both by volume (69 deals) and value (EURO498 million).

Roberto Del Giudice of AIFI says the outlook for 2002 is already positive and the completion of two significant Italian deals, the EURO1 billion buyout of Galbani from Groupe Danone and Apax’s EURO418.5 million acquisition of Azimut, will prove the catalyst for a boost in deal activity. “We think the market will grow in 2002. Also the number of funds is on the increase and so they have to invest their money,” says Del Giudice.