Abacus looks beyond Italy for Fund II

The Italian growth investor will seek European institutions as LPs for the first time as it targets €100m for its next vehicle.

Italian growth investor Abacus Partners is preparing to raise up to €100 million for its second fund, as it seeks to take advantage of an increased investor appetite for smaller, growth-orientated funds. The fund will make between seven and 10 investments in Italian businesses of between €3 million and €7 million equity each.

“The present crisis may give us the opportunity to be considered in a different way,” said Paolo Vacchino, Abacus Partners’ chairman, referring to the shift of investor sentiment away from large buyouts and towards mid-market and specialist funds.

The present crisis may give us the opportunity to be considered in a different way.

Paolo Vacchino

Like those of many Western nations, Italy’s economy has been hit by the global slowdown. In 2008 Italian gross domestic product shrunk by 1 percent, its worst performance since 1975, according to Italy's central statistics agency ISTAT. Despite this, Vacchino believes that a low level of personal debt – Italy has less than half that of the UK or Germany – could give the country an advantage over other Western economies.

Abacus’ €42 million first fund, which is now almost fully invested, comprises half institutional and half private money, all from within Italy. For the second fund, it will seek to raise up to €50 million from European institutions and €50 million from existing Italian relationships.  Abacus has yet to appoint a placement agent to market to European institutions, but intends to do so.

The fundraising market is notoriously difficult at the moment as limited partners struggle with a variety of constraints, including mis-judged over-commitment strategies and the denominator effect.

Some funds, however, have recently succeeded in attracting capital. These include European venture capital firm Index Ventures, who have just raised €350 million for an early stage fund, and PINOVA Capital, a lower mid-market German firm, which has raised €96 million on its way to a €150 million target for its debut fund.