ITALY Trends and Developments Contributed by: Alessandro Corno, Marco Nicolini and Luca Magrini, Alma LED
Climate tech and renewables One of the most significant sectoral evolutions is in climate and renewables. EU programmes and Ital - ian mid-market companies’ technical expertise are attracting significant capital volumes – often accom - panied by management transformation and digital skills development, paving the way for secondary exits or public listings. Value Creation: Operational Lever Italian GPs are progressively embracing more nuanced, hands-on value creation methodologies. Strategic sophistication While the classic leveraged buyout is foundational, its execution has shifted. The explosion in buy-and- build and platform roll-up deals attests to the value of scalable business models and generating post-deal synergies through operational integration. Operational excellence over leverage Increased competition and evolving market conditions have forced a movement away from simple financial engineering towards true operational improvement. Process digitalisation, procurement centralisation and robust management professionalisation are now key levers for raising EBITDA margins and exit multiples. Innovation in transaction structure A growing proportion of activity involves secondary buyouts and carve-outs from large corporates. Value creation depends primarily on the rapid deployment of strategic, digital and human capital, not merely capital structure optimisation. Exit strategies shift There is a growing emphasis on private market exits – including continuation funds and structured second - aries – rather than traditional IPOs, as sponsors seek certainty and flexibility in the context of volatile public market conditions. This necessitates expertise in fund restructuring and secondary market transactions. Longer holding periods The aim of creating value through operational lever, combined with buy-and-build strategies requiring thorough post-M&A integration as well as less favour - able market conditions for trade sales, are resulting
towards high net worth individuals and, to a certain extent, retail investors. Regulatory boost Reforms at both the Italian and EU levels have prompt - ed a new wave of investment vehicles accessible to high net worth individuals and, to a lesser extent, retail investors. ELTIF 2.0 and similar structures have materially expanded the domestic capital available to Italian GPs. Benefits for the PE industry This broader investor base helps mitigate cyclicality, reduces reliance on sometimes unpredictable interna - tional fundraising and supports the stable, long-term growth of the Italian PE ecosystem. This facilitates more resilient capital deployment strategies. Investment Sectors: Value in Transformation – Manufacturing continues to attract roughly a quarter of all Italian deal volume, benefiting from reshoring, automation and the enduring prestige of “Made in Ita - ly” brands. This segment allows for a robust deploy - ment of buy-and-build and consolidation strategies. New champions: food, healthcare, and green energy/energy transition Beyond manufacturing, investors are increasingly focused on food and beverage, healthcare and life sciences, and the rapidly growing energy transition space. Italy’s national commitment to energy transi - tion, supported by significant EU funding, has attract - ed investments in renewable generation, energy stor - age, and grid infrastructure. However, these sectors present significant regulatory complexity. ICT and venture capital The ICT sector shows a modest contraction in capital inflows, but services, energy and “climate tech” are increasing. Venture capital is increasingly a significant investment theme, particularly in biotech, fintech and next-generation urban technologies. These deals are capital-intensive and risky but offer significant upside potential linked to operational improvement and increased optionality in terms of exit strategies available. Strategic Focus Areas Manufacturing as core
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