It’s not easy to like a man who’s clearly much better looking, much better dressed and much better connected than you. But somehow Nino Tronchetti Provera, chief executive of Ambienta, manages to get away with it.
Maybe it’s the fact that he serves up the best coffee of any private equity firm in London. Maybe it’s because he can talk you through every one of the six goals English footballer Paul Gascoigne scored for his club, Lazio, in the mid-1990s. Or maybe it’s just that characteristic Italian charm and swagger.
Of course, in the current climate, being an Italian of any stripe is not such a good thing when you’re about to go out and ask LPs for at least €300 million – particularly when it’s for the second fund of a firm focused on ‘environmental assets’ that is yet to complete any meaningful exits.
But if you spend an hour or two in Tronchetti Provera’s expansive company, as Private Equity International did in London in November, it’s actually not hard to imagine Ambienta pulling off this missione impossibile.
That’s partly because the firm has done it once already: it closed a €217 million fund in 2009, making it one of the only European firms to raise a nine-figure sum at (what looked like) the height of the crisis.
But it’s also because the more you think about it, the harder it is to dispute its underlying investment thesis: that the world desperately needs more products and services that help us use the planet’s natural resources more efficiently and cleanly.
Here are a few facts and figures that LPs are likely to find in Ambienta’s pitchbook when it officially hits the fundraising trail early next year. Between 1950 and 2010, the massive explosion in the world population created two billion new consumers (according to the UN). In the last 15 years, water usage has jumped by two-thirds, and it’s predicted to rise by a similar amount in the next 20 years. In the last 10 years, the price of natural resources has been rising at about 9 percent a year (according to the McKinsey Commodity Price Index), as demand for commodities like wheat, oil, copper and uranium has doubled, trebled or even quadrupled. Industrialised cities in emerging markets are already pumping out more sulphur dioxide into the atmosphere than Europe was before it took steps to address the issue.
This is the area in which Ambienta operates: backing businesses that help to solve or at least mitigate some of these problems.
Does it work? Well here’s perhaps the most salient statistic, as far as potential LPs will be concerned: over the last few years, Ambienta’s current portfolio of businesses have, on average, enjoyed compounded annual revenue growth of 15 percent. How many firms can say that about their portfolio at the moment?
Nonetheless, the $300 million question remains: would you back a largely unproven fund, in a market segment that arguably doesn’t exist yet, based in a country where it’s unclear who’ll be in charge or what the currency will be in a few years’ time?