The private equity legacy of Giovanni Agnelli

Through his investment business EXOR, the legendary Fiat chairman and industrialist, who has died aged 81, played an important role in private equity spanning three decades.

( Giovanni Agnelli, the patriarch of the family that controlled Italian automobile manufacturer Fiat and led private equity group EXOR, died earlier today at 81.


EXOR was active in America from the mid ‘70s to the late ‘90s. In late 1999, the group closed its American and Asian offices to focus on deals in Europe. During its heyday in America, EXOR America had approximately $2bn under its control to invest.


EXOR investments in America included the $400m acquisition of Constitution Re in 1995 from Xerox Financial Services. Also in 1995, the firm teamed up with Clayton, Dubilier & Rice on a $2.8bn buyout of beverage industry paperboard package manufacturer Riverwood International.


EXOR America was part of a larger private equity firm, EXOR Group, which is a key shareholder in Club Med and owns a majority stake in Italy’s reigning soccer champions, Juventus. EXOR Group is listed on the Luxembourg stock exchange.


The private equity landscape is heavily populated with former members of EXOR America. Such firms as Wellspring, Brera Capital Partners, Fenway Partners, Clayton, Dubilier & Rice, and The Jordan Co all have former EXOR America employees. Brera Capital was founded by Alberto Cribiore, who started the firm after 12 years at Clayton Dubilier.


Cribiore got his start in 1970 from Agnelli, who sent him to America to help establish EXOR’s New York office. Agnelli was also a limited partner in all of Cribiore’s ventures after he left EXOR in 1982.


Describing his time at EXOR America, Cribiore said that Agnelli’s presence was felt even when he wasn’t in the office.


“He was very much the chairman of the board providing direction,” Cribiore said. “Everything had his approval.”


Joseph Haviv, a managing member of newly formed ProtoStar Partners, worked at EXOR America from 1994 to 1998. “Agnelli was really the visionary for the direction of the firm,” he said. “He was brilliant, classy, incisive with a tremendous business sense.”


Haviv, a former managing director of First Atlantic Capital, described Agnelli’s death as a major loss. “It’s the end of a dynasty, without question.”


Fiat was founded by Giovanni Agnelli’s grandfather in 1899. Under Agnelli, Fiat added to its auto empire by acquired carmakers Lancia, Maserati, Alfa Romeo and Ferrari. Under Agnelli’s 30-year stewardship, Fiat expanded into aerospace, insurance, and telecommunications. In 2000, General Motors bought a 20 per cent stake in Fiat Auto with Fiat retaining an option to sell GM the rest in 2004.


Fiat had slumped to 20-year lows after slumping sales of its autos. Through the first nine months of 2002, the company had revenues of E40.7bn. The Agnelli family was in its hometown of Turin to discuss options for revitalising the auto brand, which lost nearly E2bn in 2002.


In December, as part of an effort to cut costs and boost the bottom line, Fiat’s truck unit Iveco sold truck-rental company Fraikin to a consortium of French buyers, including Eurazeo, Pragma-Capital, and UI Fraikin estimated 2002 sales in excess of E570m.


Agnelli was also largely credited with helping to revitalize the Italian economy after World War II. In 1991 he was made a life senator of Italy for helping its economy and acting as an anchor during times of political turmoil. Fiat still accounts for approximately five per cent of Italy’s economy.


“He was the greatest industrialist in Italy since 1945 or 1950, and one of the greatest in Europe,” Cribiore said. “He was a truly historical figure in my opinion.”