TPG Bolsters Operations Team With Morelli Hire –

For the past two years, whenever Vincenzo Morelli’s name was mentioned it did not signal good news. As a managing director at turnaround specialist Alvarez & Marsal, he was like the Wolf in Pulp Fiction, with his primary function being to clean up other people’s messes. Morelli’s greatest cleanup came last year when he was able to tiptoe around liquidation and save Italian crane-maker Fantuzzi SpA from insolvency.

However, working at a turnaround firm can take quite a toll on a man’s personal life. “It can be a very heavy lifestyle,” Morelli said. “When you go into a turnaround as a CEO during an acute crisis, you basically have to live with the company from Sunday night to Saturday morning… I was on the road for 285 days a year.”

Despite the workload, Morelli depicts his time at Alvarez & Marsal, as “terrific,” but when Texas Pacific Group came calling with a job offer, he was very receptive and accepted a position as an operating partner at the firm. The pairing is good a fit for both sides. Texas Pacific Group itself has never shied away from cleaning up a mess and the firm has often found success by way of turnaround. Morelli, meanwhile, gives the buyout shop an experienced operations guy versed in turnarounds throughout Europe. He is succeeding Cornel Riklin, who in January took over as CEO of Findexa, a TPG portfolio company.

“I think my hiring is very consistent with what TPG has always done. It’s one of the private equity firms that has always emphasized finding values through operational restructuring and improving performance, and my background fits well with that,” Morelli said.

His primary role at the firm will be to monitor the progress of TPG’s European portfolio and ensure the companies are making headway toward their mapped out goals. This will be somewhat of a change in that the companies Morelli will be watching over will not necessarily be on the cusp of collapse.

This appointment is a return to private equity for Morelli. Prior to joining Alvarez & Marsal, he had served as a senior advisor at Clayton Dubilier & Rice. There he led the buyout of Italtel from Telecom Italia, a company that is expected to go public this spring.

While TPG will not be counting on Morelli to serve as a rainmaker for new investments, he said he would certainly be opportunistic in bringing prospective deals to the firm’s attention. Also, Morelli will be active in dealmaking in the sense of helping determine valuations and picking out operational efficiencies.

Another reason that Morelli cited for the switch back to private equity was the ability to share in the spoils of a successful effort. “I always enjoyed being on the principal side of private equity,” he said. “When you’re a partner in a deal you get an opportunity to participate in the investment. From the turnaround side, you can’t do that because you’re not investing capital.”

Looking ahead, Morelli believes that Europe will provide a trove of restructuring and turnaround opportunities. He said that unlike the U.S., in Europe companies have been protected by the government and many of the unions have resisted change, which ultimately has served to stall whatever restructuring was needed in a number of industries throughout Europe.

“There is a lot of restructuring that has to be done. Because you don’t have the Chapter 11 tools as in the U.S., the only way to do a restructuring effectively is to bring in fresh capital, and that’s where a private equity firm can come in and reap some good opportunities.”

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