HIG Capital opens in Milan

The firm’s first office in Italy will be led by former Atlantis Partners co-founder Raffaele Legnani.

HIG Capital’s Europe affiliate has opened a Milan office, which will be led by newly appointed managing director Raffaele Legnani, a former founding partner of Milan-based private equity firm Atlantis Partners, according to a statement.

From the Milan office, HIG’s first in Italy, the firm will provide debt and equity capital to help midsize Italian companies with a turnover above €50 million expand internationally.

“There are many attractive businesses and talented managers in Italy and, despite short term challenges, we have every confidence that, in the long run, the Italian economy will recover and get back on a growth path,” Sami Mnaymneh, HIG co-founder and managing partner said in the statement.

At Atlantis, Legnani focused on Italian mid-size companies in special situations. He previously worked at private equity firms Stellican, in London, and at Connecticut-based Wexford Management. Legnani also worked in investment banking at Goldman Sachs in London.    

While some investors have been wary of private equity investing in Southern European countries such Spain, Italy and parts of France due to widespread macroeconomic uncertainty, a series of successful fundraises in 2013 by managers in the region has led to improved investor sentiment recently.

“These are cycles,” Andrea Bonomi, founder of European private equity firm Investindustrial told Private Equity International in a previous interview. “Last year everything was against Southern Europe. Right now, the Nordic market is over-invested. So if you want to put money in Europe, Southern Europe doesn’t look that bad.”

However, country-specific problems remain a cause of concern for many investors.

“In Italy, there’s a mismatch in price expectations between buyers and sellers, and a lot of [that] is due to political uncertainty,” Bonomi said.

The opening of HIG’s Milan offices follows an announcement from Kohlberg Kravis Roberts earlier this week that its European business had opened an office in Madrid. Since 2010, KKR has invested more than $1.2 billion in Spain, according to a statement.

HIG Europe has a team of 50 investment professionals in its London, Hamburg, Madrid and Paris offices. The team closed its most recent fund, HIG European Capital Partners II, on €835 million in July, according to PEI’s Research and Analytics division. Fund II exceeded its €750 million target and will focus on mid-market buyout and growth capital investments throughout Western Europe. HIG Europe’s prior fund closed on €600 million in 2007.

Yolanda Bobeldijk contributed to this report.