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Banca di Roma to launch funds

The Italian bank’s Mediocredito Centrale merchant banking unit is to set up two new private equity funds for retail and institutional investors.

Mediocredito Centrale (MCC), the merchant banking arm of Italian bank Banca di Roma, has confirmed that it is to launch two funds focussing on Italian PE opportunities.

Sofipa Equity Fund I, was launched earlier this week and is looking to raise up to E150m from Italian retail investors. The fund will provide development capital to small and medium size Italian companies, taking minority stakes with investments of E5m to E15m. The minimum individual investment is expected to be E50,000.

Mediocredito Centrale’s private equity unit, Mcc-Sofipa Sgr, will manage the fund. According to Giovanni Cimmino, investment manager at Sofipa, the fund will be looking to invest in non-quoted Italian companies with strong growth potential. “With the exception of real estate, insurance and banking, we will be looking at all sectors in which we see strong growth opportunities.”

Cimmino added that MCC was also planning a second fund, Sofipa Equity Fund II, which would target institutional investors. The fund would aim to raise E400m and to make investments of between between E10m and E40m in leveraged buyouts in private companies. According to Cimmino, Mediocredito Centrale will take a 20 per cent stake in this second fund.

Many practitioners in the Italian market believe that there are good opportunities for private equity investors going forward, partly because of the relative lack of maturity of private equity as a financing tool in Italy to date. Fabio Sattin, CEO of Private Equity Partners in Milan, commented: “Given the fact that the UK and Italy have comparable populations and number of enterprises, the fact that private equity investment in the UK is three times that seen in Italy suggests that there is great potential for successful PE investment in Italy.”