From family businesses 260 billion in revenues

A closer bond that is slowly growing over time. This is the one between family businesses and private equity funds, as certified by the latest study conducted by Aifi, Liuc University and the Fondo Italiano d'Investimento, which will be presented today during a dedicated event. A couple of numbers suffice to understand the positive evolution of a relationship once viewed with suspicion, to say the least. Family businesses in Italy are worth EUR 260 billion in turnover and account for 80% of the national GDP. Well from 2014 to 2023 private equity funds invested EUR 91.3 billion in the country. This figure is particularly significant and is probably the result of the growing interest shown by investors in family-owned companies, which in turn has been more favourably received by entrepreneurs: if between 2013 and 2017 an average of 73 transactions per year were carried out, between 2018 and 2022 the figure jumped to 184. So much so that a total of 1,285 deals were completed over the entire period, but almost half of these were concluded between 2020 and 2022. As for the targets, just over 50 per cent involved companies with a turnover of less than 20 million and 26.2 per cent industrial product companies.

"If in the past we have seen a reluctance on the part of family businesses to open their capital to private capital, this study shows a reversal of the trend, with a growth in investments by private equity funds," commented Innocenzo Cipolletta, president, Aifi, who with respect to the type of operations concluded highlighted how these were both "total sales of shares and the sale of minority interests", which allows "the family to remain involved in the shareholding and governance of the company". And this is also very clear in the numbers. Approximately 86% of transactions are buyouts but on average in 39% of cases families remain involved in the capital and the percentage is clearly increasing: in 2013 the figure was 19.6% but in 2022 it exceeded 50%, which means that in one out of two cases between private equity and family a strategic partnership is established. "The family business has always been the pillar of the Italian economy," commented Davide Bertone, CEO Fondo Italiano d'Investimento, "It has always won by growing, innovating and adapting to the future. Playing on the offensive. The research conducted with Aifi and Liuc confirms how private equity can accompany this challenge by giving propulsion and continuity in the medium and long term to the very role of entrepreneurial families. Who have learnt to partner with funds in the service of their business. Private equity is made up of capital that brings with it people, relationships, skills, ambition, discipline, flexibility and a risk culture. And you can see the results. I am thinking of the success stories that have seen us and see us directly involved as Italian Fund: Gruppo Florence, HNH Hospitality, Quick, Marval, Maticmind. Contributing to the development of the family business is a challenge made for us'.

Which, moreover, is also reflected in the performance metrics that these transactions ensure. Again according to the survey, divestment ensures an average cash on cash of 2.3 times and an IRR (internal rate of return) of 23%. Fundamental, however, for the alchemy to work is finding the right balance with the interlocutor one chooses. "For entrepreneurial families," emphasised Professor Salvatore Sciascia, co-director of Fabula, the Family Business Lab of LIUC University, "it is crucial to identify the financial partner that understands their vision and values in order to properly structure the terms of the agreement, avoid future tensions, and maximise the benefits of the operation. With the right partner, the family business can dispose not only of new capital, skills and relationships, but also of governance mechanisms that enable it to better regulate the complex relationship between family and business logics, in the interest of all stakeholders'.