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Two new funds for Sofipa

Banca di Roma is stepping up its private equity activity with the launch of two new funds. Mediocredito Centrale (MCC), the merchant banking arm of the Italian bank unveiled the first of the funds this month. MCC’s private equity unit, Sofipa SGr will manage the funds. Both funds are expected to close by year-end.

Sofipa Equity Fund I is targeting retail investors and is looking to raise up to EURO150 million. Average investment size will be between EURO5 million and EURO15 million for minority stakes in medium-sized Italian companies.

The second fund, Sofipa Equity Fund II is targeting institutional investors and is still awaiting authorisation from the Banca di Italia. The fund has a target of EURO400 million and will commit to buyouts with a generalist focus in the EURO20 million to EURO40 million range.

Giovanni Cimmino, investment manager at Sofipa, is optimistic about fund raising: “Times have been tough, but it will be possible.” He adds that MCC will be committing up to 20 per cent of the second fund.

Italian funds raised and invested were both down in 2001 in spite of an increase in private equity players in the region, according to figures from the Italian private equity association, AIFI. AIFI recorded the first slowdown in the Italian market for a decade.

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

However, domestic players are positive for 2002. Two significant Italian deals have completed recently: the EURO1 billion buyout of Galbani from Groupe Danone and Apax’s EURO418.5 million acquisition of Azimut.

There is a close-knit community of players in Italy. A recent survey conducted by the Bocconi University of Milan ranks BC Partners, B&S Electra, Investitori Associati, Permira, 3i and Private Equity Partners as established leaders in the Italian market.