Marco Albissi: “Economic growth and a positive outlook are boosting PE growth in Italy”
One of the investment managers at Alto Partners, a leading mid-market private equity firm in Italy, talks to us about the current Italian investment environment and what makes Alto stand out.
Leaders League: What trends have you been seeing in the Italian private equity market this year, as the world has begun to recover from COVID-19?
Marco Albissi: The private equity market in Italy has been vibrant since the end of 2020, and in particular in 2021, which has seen a record number of deals. Italian real GDP has shown outstanding growth in 2021 – an expected 6% increase, outperforming Europe’s (5%). Moreover, we can have a positive outlook thanks to the Mario Draghi government, especially his recovery plan, which was appreciated by Europe and lays the basis for future growth.
To sum up, the rapid recovery of the economy and the general positive outlook contributed to the strong performance of private equity in Italy in 2021.
What makes Italy an attractive market for international investors, and what could the country do to become more attractive to investors?
Italy is an outstanding market, especially in the SME (small to medium-sized enterprises) bracket. There are excellent companies in many industries in this bracket – companies that could find benefits from partnerships with private equity, helping them solve generational issues and their finance and structure for future growth.
In terms of what could be done to make Italy more attractive for investors, I think a rationalisation of bureaucracy and of the fiscal and legal framework would help, but this is already a focus for the current government.
What challenges do you foresee for private equity in Italy over the few years?
In the short term, the main challenge for the private equity market in Italy is the increase in multiples, though that increase is slightly lower than in other European countries. To address this, private equity firms must maintain a disciplined approach to investing. They should leverage their sourcing network, be selective in investing, and focus on strategic growth plans, both internal and external.
What is Alto Partners’s positioning in the private equity market, and what makes it stand out?
It’s one of the most experienced private equity teams in Italy, having completed more than 30 deals over the 20-plus years of its existence. This journey has helped us build a strong network of advisors, entrepreneurs, managers and other professionals that help us in deal sourcing, analysing potential investments thanks to their sector-specific experience, and exploiting growth opportunities. Our solid experience, disciplined approach to investing, and continuous track record in investing and divesting over the past two decades mark us out.
We are active in all of Italy’s key sectors: food and beverages, high-end mechanics, healthcare, and luxury goods and fashion.
How has Alto Partners grown in its approach since its inception? What wisdom, in terms of either investment or management, has been gleaned since beginning?
Wisdom is key in private equity; experience plays a fundamental role. Alto Partners has become more effective at evaluating opportunities and developing a strong network that helps insource deals. Its long journey has helped it do four things: avoid mistakes, which are always costly in private equity; anticipate and manage macroeconomic and sector-specific cycles; better assess potentials for the development of investments; and finding the best way to create value in our portfolio companies.
Private equity is a sector in which the learning curve really makes a difference. It’s a sector about people, and it’s the team that makes the difference. And we have a really experienced team.
We’re currently completing the investments in our fourth fund, and are in the process of raising a fifth fund, which will be slightly larger – we’re aiming for €300m. We expect it to have its first closing in H1 2022.
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