Alto Partners SGR, the Milan-based private equity firm, has held a €50 million ($59 million) first close on its second fund, Alto Capital II. The fund has a target of €150 million.
The fund received commitments from over 20 Italian investors and will invest in mid-sized companies in the northern regions of Lombardia, Emilia-Romagna, and Veneto.
In an interview with PEO, Alto founding partner Raffaele de Courten said that the firm planned a €100 million second close early next year, and a final close in six to nine months. He added that the firm was pursuing a “two-tier strategy” of targeting Italian investors before going to the international market. “We want to show our capability of attracting domestic investors first.”
The fund has received commitments from Italian institutional investors including insurance companies Assicurazioni Generali, Alleanza Assicurazioni, and Fondiaria-SA; and banks such as Banca Carige, Banca Popolare dell’Emilia Romagna, Banca Popolare di Sondrio, Banca Popolare di Vicenza, and Veneto Banca. Family offices, entrepreneurs and industrial managers have also committed to the fund.
Alto Capital II will focus on growth and cash-generative businesses with enterprise values of €15 million to €80 million. Although it will primarily target buyouts, it will also make minority investments in companies with strong shareholder protections and pre-determined exit routes.
De Courten says that investors have been slow to wake up to the possibilities of private equity. “Institutional investors invested quite heavily in very poor vintages, such as tech funds between 1999 and 2001 and didn’t see much distribution, so they’re not inclined to reallocate.” However, he adds that they are beginning to look more seriously at the asset class: “Italy is one of the large economies but has a very poor, unsophisticated financial market, so there are lots of opportunities.”