Ferrari CEO launches consumer fund

(PrivateEquityCentral.net) Ferrari chairman and chief executive officer Luca Cordero di Montezemolo announced today he has raised E110m in a first close for a private equity fund that will invest in the Italian consumer goods, media, and entertainment sectors.

Founding limited partners in the Charme fund, which is targeted at E150m, include institutions Deutsche Bank, Unicredito Italiano, and Monte dei Paschi di Siena, as well as Diego della Valle, founder of Tod's and president of Florence's Fiorentina soccer team.

“This initiative represents the first phase of what will be a long-term entrepreneurial project that will be flexible and dynamic,” Montezemolo said in a statement. Typical “target companies” for the fund will have strong brands as well as primary customers “who give priority to quality and the social status of the goods that they buy,” Charme said in the statement.

The firm said its investments will not necessarily be restricted to the luxury goods sector, but will be companies that show a high level of potential in terms of branding and strategic marketing. “Those companies that Charme believes will benefit most from the investment made will be selected.”

Figures available from the Italian Private Equity and Venture Capital Association (AIFI) show the Italian private equity market suffered its first setback last year, after a decade of steady growth. Funds invested during 2001 totalled E2.185bn, a decrease of 26 per cent on the 2000 figure of E2.968bn. The number of deals declined by 24 per cent to 489 in 2001 from 646 in 2000. In 2001, Italian firms raised E1.875bn in 2001, a 36 per cent decrease on the previous year’s total of E2.925bn.

The biggest domestic private equity investors in Italy are in-house arms of major banks. Merchant bank Livolsi & Partners raised a E200m fund, Convergenza, in 1999 with a focus on the telecommunications, media and content technology sectors. Investment bank Cofiri has set up a private equity division and launched a fund, Improvement 1, targeted at E200m to invest in Italian mid-market companies.

Mediocredito Centrale, the merchant banking arm of Italian bank Banca di Roma, has two funds in the works, Sofipa Equity Fund I, aimed at retail investors and targeted at E150m, and Sofipa Equity Fund II, aimed at institutional investors, and targeted at E400m, including a 20 per cent cornerstone investment from Mediocredito Centrale itself.

Milan-based B&S Private Equity is one of the largest independent private firms in Italy, with approximately E300m under management in its Italian Private Equity Fund III, which is managed by B&S Equities in Switzerland. Investors in the fund, which was marketed exclusively to non-domestic institutions, include HarbourVest Partners, JP Morgan, Swiss Life and Goldman Sachs. In July, B&S Private Equity made two investments, acquiring Carapelli, the Italian olive oil brand of French edible oils group Cereol, in a E101m buyout, and supporting the management buyout of self-propelled crane manufacturer Autogru Pm.