Bear Stearns, the New York-based investment bank, has announced plans to invest up to €200 million ($240 million) in Italian lifestyle companies on a deal-by-deal basis in partnership with Opera, the private equity unit of Italian luxury goods manufacturer Bulgari.
Opera, which has around €315 million under management on behalf of Italian and foreign institutional investors, said its intention was to invest around €250 million a year in companies making products such as speciality food and wine, luxury goods and high-performance boats.
Last month, it was reported that Opera has so far raised around €90 million for its second fund, which was launched in 2003 with a €250 million target, though there has been no official closing yet. The firm, which is headed by former Morgan Grenfell Private Equity director Renato Preti, closed its first fund in 2000 on €225 million, with Bulgari committing 12 percent of the fund’s capital.
In a statement, John Howard, chief executive of Bear Stearns Merchant Banking, said it chose to work with Opera because of its deal flow and Bulgari’s network of contacts. He hinted that the partnership may be followed by others of a similar nature around Europe. In 2000, the bank invested alongside US private equity firm Texas Pacific Group in the buyout of Swiss shoemaker Bally.
According to the Wall Street Journal, there were ten private equity led deals in the luxury goods sector in the first quarter of 2004, including the €21 million purchase of Scottish cashmere brand Ballantyne by Charme, the Italian private equity firm set up by Fiat chairman and Ferrari boss Luca Cordero di Montezemolo.
Analysts say the opportunity for private equity firms in the sector stems from the existence of a large number of small, family-owned businesses that lack international scope and an absence of market-oriented management – both of which can be provided by astute investors.