The effects of the international financial crisis have reached the Italian private equity and venture capital market that, after hitting record levels in 2008, in the first half of 2009 saw a decrease in activity. Between January and June 2009, the market recorded 155 new deals, for a total value of 1,069 mln Euro (-61% on first semester 2008 figures). The decrease in the number of deals, on the other hand, was limited to 9%.
As usual, the greatest part of the total amount invested flowed into buy out deals that represented 74% of total with 785 mln Euro invested. It must be underlined that this figure is equal to a 36% decrease on first semester 2008 figures, while the number of buy out deals, that reached 43 from 49, registered a 12% decrease. Therefore, the most dramatic decrease was registered in the deals' size, as proved by the lack of so-called mega deals (over 300 mln Euro) in the first half the year.
As in the past, expansion deals attracted the greatest number of investments, with 58 deals for a total value of 132 mln Euro invested (+2% on first semester 2008 figures).
On the other side, the growth trend in the early stage segment continued, with a 7% increase in terms of invested volumes, equal to 56 mln Euro. With 46 deals (+15%), the early stage segment came second in terms of number of investments.
Positive results came also from the turnaround segment: in the first 6 months of 2009, the total amount invested in this kind of deals reached 78 mln Euro from 22 mln Euro recorded in the first half of 2008.
In general, it is worth underlining that the average size of the amount invested in each single deal underwent a drastic reduction, down to 7 million Euro in the first half of 2009 from the 16 million Euro recorded in the first half of 2008.
Finally, as regards investments in Italy-based companies, the Northern regions attracted the 66% of total investments, while 30% flowed into the Central areas and 4% into the South.
The crisis had an especially strong impact on the divestment activity: on one side, it made way out difficult; on the other, it influenced the evaluation of the companies held in portfolio. Over a total of 1,069 mln Euro divested in the first part of the year, a large percentage was represented by the depreciations that took place in the semester, equal to 93% of total amount divested.
In terms of number of divestments, down to 67 (-27%) in the first half of 2009 from 92 in the first 6 months of 2008, more than a half (54%) was represented by write offs. Among the other types of way out, trade sale was the most common, representing 34% of total number of divestments.
Finally, the difficulties of the current economic context affected the possibility of raising new funds: institutional investors in Italy attracted financial resources for a total of about 290 mln Euro, 68% less compared with the same period of 2008.
In terms of geographic origin of the funds raised, the domestic component represented 94% of total independent fundraising (82% in the first half of 2008).
These resources will be mainly aimed at financing investments in infrastructures (42%) and expansion deals (34%).