MILAN (Reuters) – A number of leading financial firms including UniCredit and Credit Agricole’s asset manager Amundi have sponsored Italy’s first private equity fund targeting retail investors.
The fund, dubbed HOPE, aims to raise 500 million euros ($581 million) from both professional investors and small savers, who can invest as little as 1,000 euros.
Italian households held net financial assets of 3,809 billion euros at the end of 2020, according to the Bank of Italy. Amid the uncertainty caused by the pandemic, deposits rose by 85 billion euros last year, more than twice the average increase of the previous five years.
“The idea behind HOPE is to funnel Italy’s huge private savings into the country’s real economy to fuel economic growth,” HOPE CEO Claudio Scardovi told Reuters.
Backers of the project also include Italy’s top insurer Generali, banks Banco BPM, BPER and BNL, the Italian arm of France’s BNP Paribas.
Sponsors have provided financing to get the venture off the ground and some have also given a preliminary commitment to invest in the fund when it launches.
“Italy needs to grow to sustain its public debt, which is being financed in part by other euro zone members such as Germany and France through the European Central Bank,” Scardovi said.
Extraordinary economic support measures deployed by Rome during the COVID-19 crisis have lifted Italy’s public debt, one of the world’s largest, to 2,726 billion euros – more than 1.5 times the country’s domestic output.
The country, plagued by chronically sluggish growth, is banking on the post-pandemic recovery to lower its debt burden.
Private equity funds are enjoying a boom phase as investors hunt for returns amid negative rates and sky-high valuations on financial markets awash with cheap liquidity.
“Inflation is upon us and investing in unlisted real assets is the best defence strategy against it,” Scardovi, formerly at consultancy AlixPartners, said.
“We want to give ordinary Italians access to the private equity universe … by putting a share of their savings in a diversified portfolio with exposure to corporate, but also real estate and infrastructure.”
HOPE, which targets a double-digit rate of return on its investments, is awaiting a green light from Italian market regulator Consob in early 2022, before it starts distributing its products through the financial institutions that backed it.($1 = 0.8611 euros)
(Reporting by Valentina Za; Editing by Kirsten Donovan)