Keeping a low profile, but still getting the deals done, is Wizard Partners, an Italian private equity firm which was established via a management buyout from Hong-Kong-based private equity firm Morningside last year. Wizard has raised around e200 million from Asian and European institutional investors for investments across Europe. There are four partners at the firm, Luigi Maniglio, who led the MBO, John Schwarz, Luca Rizzi and Andrea Siano. At the end of last year the firm set up a Paris office, headed by Francesco Noseda to manage the firm’s strategy to buy and build a chain of 50 hotels in Europe over the next five years. The nucleus of the chain will be located in France, following plans to buy out the owners of Les Hotels de Charme. Further additions to the portfolio will be made through consolidation, with plans to acquire several privately owned properties. Wizard hopes to achieve an internal rate of return of 38 per cent over five years, with the intention of further fuelling European consolidation by selling the brand on to a big trade buyer.
In Italy, Wizard’s focus is on “resolutely old technology deals”, says John Schwartz. The fund takes majority positions of between e5 million and e100 million in cash generative traditional businesses and helps them to grow. “We look for businesses that have niches and are unexploited. We don’t go for the mega deals in Italy those are few and far between. We do deals that are slightly smaller than those the other private equity houses are targeting. We then build it up and make a product for other private equity houses to develop,” says Schwartz. In effect, through its exit strategy Wizard is helping to build the secondary buyout route in Italy. “We try and be extremely transparent to the market. Part of what we are doing is exit to the private equity industry.”