“The right way forward is a combination of the new ways and the old”

In July, finance expert Riccardo Agostinelli jumped ship with his team from Gattai, Minoli, Agostinelli & Partners to Molinari e Associati, transforming the latter into Molinari Agostinelli. We speak to both name partners about what makes the firm stand out.

Posted Friday, November 5th 2021
“The right way forward is a combination of the new ways and the old”

Leaders League: It has been several months since Molinari e Associati became Molinari Agostinelli. How would you characterize the impact of you (Riccardo) and your team’s arrival at the firm?

Riccardo: We contributed our capacity, experience and portfolio to a great platform that was created by Ugo and the other partners. The impression is not of transformation, but of growth on very solid pillars. The firm is clearly domestic but very internationally minded, and keen to invest in important, profitable infrastructure. So we’re talking not about transformation but about the creation of synergies and growth.

The integration is working very well; the chemistry is there. These are extremely important elements for the future growth of the firm. Our client base is very significant, from major financial institutions to important corporates. In all practice areas we are experiencing great cooperation, with colleagues working really well together. One client we recently advised even forgot we had moved firm – it’s as if we’d always been advising them as Molinari Agostinelli! That was a heartening message.

Ugo: We are two groups of people with the same philosophy and view of the profession. The chemistry is so tangible that it feels like we’ve worked together for a long time, not just the last five months.

 

The Italian legal market for M&A and finance is a mixture of full-service firms, mid-size international firms, and small boutiques, all of which claim that their business model is the best. What makes Molinari Agostinelli competitive?

Ugo: We have the dimensions of a boutique, but we organize ourselves like a large firm. In this sense, not many firms can be compared to us. We respect all the other models, from large firms to small boutiques, but they are not right for us.

Riccardo: As part of our strategy, we are focused on extraordinary transactions. Concentrating on major deals, you need the right critical mass, otherwise you can’t assist sophisticated clients properly. But we have the right capacity for major practice areas: corporate, finance, insolvency and litigation, which are the areas we focus on. We decided not to have certain practices such as labor law; this may change in future, but currently it’s a strategic decision.

Ugo: We also innovate; we will not always remain in the current structure. We are currently in the process of insourcing a tax practice so we can offer our clients tax services in-house. Tax is a crucial element of any sophisticated deal, so to be in a position to offer this service to our fund clients is crucial for a dealmaking advisor. We’re investing in what we need to invest in, and we filter out what isn’t necessary.

 

Two large Italian firms – Nctm and Pirola Pennuto Zei & Associati – recently entered into separate verein arrangements with firms in France and Germany. Would Molinari Agostinelli consider pursuing a similar route, formally allying with other European firms? What would your thoughts be on such a move?

Ugo: At the moment, no. We don’t think this kind of structure is very effective; we prefer to maintain the possibility of choosing a specific firm or department on a case-by-case basis, rather than being limited to choosing from the network. In our experience, these kinds of networks are not very effective in terms of unifying operations, and transactions are not implemented with the same level of consistency as if all the decisions were made within one firm.

Riccardo: I agree. With great respect to firms that have decided to follow this structure, I see more disadvantages than advantages. You would not actually have the advantages of an integrated platform. With international firms, you have a cross-border platform from which you can handle multi-jurisdictional deals. But with an alliance, you’re acting with a combination of different brands and precedents, with practice areas that aren’t always as integrated as the branding suggests. So the platform isn’t integrated.

At the same time, there are lots of potential conflicts. So there might be marginal benefits, but if you consider that when you’re alone you can choose your own best friends, being very independent – but with very good friends in certain jurisdictions – is the way forward.

Ugo: Another risk is that the balance between alliance members will not last. One member might end up with more benefits than another, and with the passing of time, this could create problems.

Riccardo: For example, all major international firms have a base in London, especially for European transactions. You may have a situation where the dealflow will always be from one country to another, and not vice versa. Sometimes it can be very difficult to reciprocate.

 

In what ways has Molinari Agostinelli changed for the long term, following the changes to working habits forced on all firms by the pandemic? What lessons were learned, and has the way you interact as a firm changed permanently in any way?

Ugo: “Smart working” might be a good way to work for others, but in our firm it’s not very effective. Teams need to cooperate with each other on a personal basis; crucial aspects are lost through “smart working”. Some aspects will stay; for example, there will be less frequent business trips, because now we can catch up via a screen. But I don’t think our methods will change in the near future. Internally, we will return to the methods we were using before the pandemic, with everyone back in the office.

Riccardo: We learned that it’s possible to maintain relationships remotely thanks to technology and new tools, and that we don’t always need to travel to other business centers. But does this mean you can eliminate face-to-face communication? No. It just means you can be more selective. Rather than spending a full day for one or two meetings in London or Paris, which loses part of the day, we can achieve the same result via videoscreen. The right way forward is a combination of the new ways and the old.

Ugo: So basically, fewer business trips, but back to the office.

 

Could you talk us through the most interesting M&A deal the firm has handled this year, and what made it interesting?

Ugo: A €600m acquisition we made for a consortium of US and Italian investors – including York Capital Management, Marseglia Amaranto Energia e Sviluppo and an undisclosed investor – of Global Solar Fund, a renewable energy group that owns 174 wind farms in southern Italy.

The interesting aspect was that the seller was in insolvency proceedings in the Cayman Islands. We had to study specific aspects of this jurisdiction, and this acquisition included the restructuring of a huge amount of debt owed to a Chinese bank. This is extraordinarily complicated: risky on one hand, but potentially very satisfying for the investor on the other.

 

Could you talk us through the most interesting finance transaction the firm has handled this year, and what made it interesting?

Riccardo: My team and I arrived in early July, but I would like to mention the acquisition financing granted by international and Italian banks to Apax Partners for its €500m purchase of Lutech. The financing was around €340m, with a mixture of bond and bank debt made available to Apax Partners. The bonds were listed in Vienna for technical reasons. It was a mix of acquisition financing, refinancing and revolving liquidity. The international lenders included BNP Paribas, Deutsche Bank, Nomura, NatWest, Intesa Sanpaolo and UniCredit. We’re talking about big players, sophisticated finance, sophisticated clients.

 

What are the key market challenges you foresee over the next 3-5 years, and how does the firm plan to overcome them?

Riccardo: Our market is undergoing so many changes. There was a period where UK firms were very successful in Italy; then US firms; now Italian firms are beginning to resurge. To be successful, you have to be strong in your jurisdictions. When you select certain practice areas, you need the right critical mass, expertise and experience.

We don’t just react to market needs – we try to anticipate them. There might be macroeconomic periods where restructurings might dominate; at other times, inbound transactions are the norm. We are prepared for both kinds of economic cycle.