(Finance) – “We had a first half of the year that went very well. The private capital market is certainly recovering: falling rates mean having leveraged buyout operations with a lower cost of money but it also means raising capital compared to alternative returns that are lower. We offer higher returns and therefore we have less competition from other investments that, clearly, like bonds and so on, yield less. So not only did the first half of the year go well but I expect the second half of the year to give very encouraging signs. I believe we will close 2024 well. After all, in July and August we already had some important closings of operations and the raising of capital, which has improved this year, will certainly lead to more investments in the years to come”. This is what he states Anna Gervasoni is the general director of AIFI commenting on the Data on the Italian private equity and venture capital market in the first half of 2024 that emerge from theanalysis conducted by AIFI, in collaboration with PwC Italia.
The data show that the first part of the year saw a total collection (on the market and captive, i.e. coming from the parent company) equal to 2,831 million euros, up 43% compared to the first half of 2023, also thanks to some significant closings. The operators who raised in the period were 18 (20 in the same period of the previous year). collection on the market was equal to 2,755 million, more than doubled compared to the same period of the previous year. The main sources of collection on the market were: pension funds and provident funds, 24%, public sector and funds of funds
institutional, 15%, and sovereign funds, 13%. At a geographical level, 66% of the capital comes from domestic investors. With reference to the investment target, it is expected to invest 43% of the total capital raised in expansion operations and 35% in buyouts.
“In the first half of the year we see a return on large investments that bring the amount to 4.5 billion euros – he declares Innocent Cipolletta, President of AIFI –. The role of international operators is consolidated, covering an increasingly strategic role for Italian companies and the real economy”.
The amount invested was equal to 4,459 million euros, up 40% compared to the 3,189 million of the first half of 2023. It is worth noting the presence of 7 operations with an amount greater than 150 million euros, compared to the 3 recorded in the same period of the previous year. If we consider only investments with an amount less than 150 million, the figure for the first half of 2024 is in line with the same period of the previous year (2,364 million, compared to 2,329 in 2023). The number of operations has
stood at 299, down 14% compared to the first part of 2023 (346 investments), distributed across 227 companies.
In detail, the venture capital operations (investments in companies in the first phase of the life cycle, seed, startup, later stage) decreased by 17% in terms of number (193), while the amount invested increased by 21% (494 million euros), demonstrating a larger average size of the investments.
The buyout (acquisitions of majority or total shares) recorded an increase of 14% in amount, equal to 2,528 million, while the number, equal to 69, decreased by 8%. The expansion (minority investments in capital increase aimed at the growth of the company) was characterized, instead, by an increase of 76% in amount, equal to 370 million, and of 28% in number, with 23 operations.
As regards the infrastructureinvestments were 7, compared to 14 in the previous year, but the amount grew by 146% (649 million euros). Turnaround operations (aimed at supporting companies in difficulty) were only 5 (4 in the same period of the previous year), for an amount equal to 48 million (+66%).
“The decline in interest rates, understood as a structural phenomenon, brings benefits to our sector. We – he explains Gervasoni – we help entrepreneurs and businesses to acquire others also using debt, debt costs less and therefore this favors acquisitions. On the other hand, we raise capital on the market and in times of high rates for free risk products such as government bonds, clearly our offer of alternative products becomes more complicated to sell. We give very high returns, double digits, obviously at this time we raise more easily from institutional investors and also Retail. So this will certainly drag a positive cycle of our private Capital”.
“In the first half of 2024, there was a rebound in the amount invested compared to the same period in 2023, with a reduction in the number of investments more than offset by the increase in the average ticket – comments Francesco Giordano, Private Equity leader of PwC Italy –. A positive sign is the growth of initial investments, while follow-ons remain more or less stable in value. Interesting is the increase in disinvestments (+137% in terms of amount and +30% in number) certainly a good sign for the health of our market”.
Still on the investment side, from the point of view of company size, companies with less than 50 million in turnover prevail once again, representing 79% of the total number (87% in the first half of 2023). As regards the sectoral distribution, in terms of number, in ICT sector 93 operations were completed (31% of the total), 51 in the medical sector (17%) and 49 in industrial goods and services (16%).
In terms of geographical distribution75% of the 267 operations completed in the first half of the year in Italy were carried out in the North (equal to 199 investments), 18% in the Centre (49) and the remaining 7% in the South and Islands, totalling 19 investments. At the regional level, in line with previous years, Lombardy ranked first in terms of number of operations (120, equal to 45% of the total), followed by Friuli-Venezia Giulia and Lazio (both 21, 8%).
With reference to the divestmentsduring the first half of 2024, 70 were made (distributed across 51 companies), a number that marks a 30% growth compared to the first half of 2023, when there were 54. The disinvested amount, calculated at the historical purchase cost, stood at 2,363 million euros, compared to 996 million in the first half of 2023 (+137%).
In the distribution of divestments by type, In the first half of the year, sales to industrial entities prevailed both in terms of the number of divested companies, 24, equal to 47% of the total number, and in terms of the amount disinvested (963 million euros, 41%).