Soros backs first Italian mezzanine fund

Backed by institutions including Soros Fund Management, Presidio I, the first-ever subordinated debt fund dedicated to the Italian market, has raised €50m.

A new mezzanine fund dedicated to the Italian market, Presidio I, has announced a first closing in line with the target amount of €50 million ($60.6 million). According to Dow Jones, the fund is backed by Soros Fund Management LLC and is due to start operations soon.

Primed to take advantage of the current lack of mezzanine investment activity in Italy, the fund will aim to provide acquisition capital and strategic financing of up to €15 million to smaller Italian companies with annual turnovers of between €10 and €100 million.

Francesco Gallotti, who along with Claudio Casnedi manages Presidio I, told Dow Jones that in contrast to the rest of Europe, where up to 85 percent of acquisitions involved mezzanine finance, subordinated debt was “non-existent in Italy”. This was mainly due to the fact that Italian banks until recently have been willing to lend money at low rates, with senior debt being cheap and abundant, Gallotti was quoted as saying.

The fund is reportedly backed by Soros Fund Management LLC, the Mellon Financial Corporation and a number of Italian banks. The managers plan to raise up to €150 million in total by the autumn from institutions including local banks and family offices.

News of Presidio’s progress comes while Italian Mezzanine, another debut subordinated debt fund dedicated to the Italian market, is understood to be on track for a first close in the near future. Set up by Italian banker Roberto Liguori, this fund is aiming for a final close at €100 million with an intention to make around 10 investments in Italian mid-market companies.