- 1999 -Venture Capital and
Private Equity in Italy
A.I.F.I.Italian Venture Capital and Private Equity Association
A.I.F.I. Members
A.I.F.I.
15
22 2428
30 30 31 3032 33 34
49
13
8
15
8
8
3
13
8
20
7
7
3
13
9
28
8
7
3
1
0
10
20
30
40
50
60
70
1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 '09/2000
Banks and banking financial operators Italian closed-end funds International operatorsCorporate/Private investors Public operators Co-operative financial operatorsIncubators
5558
69
Investment activity by number, companies and amount
198 175
516
234 209
601
269 227
944
390 309
1.780
0
500
1.000
1.500
2.000
1996 1997 1998 1999
Number Companies Amount (Euro mln)
A.I.F.I.
+88 %
Average invested amount (Euro mln)
2,60 2,50
3,50
4,56
0
2
4
6
1996 1997 1998 1999
A.I.F.I.
1999 - Stage distribution of investments
153 147 124
356
31
11865
878
17
274
0
300
600
900
Seed/Start up Expansion Replacement Buy out V. & O. purchase ofquoted shares
Number Amount (Euro mln)
A.I.F.I.
1999 - Stage distribution by % of amount invested
39%
8%
32%
20%
8% 7%
17%
50%
4%
15%
0%
10%
20%
30%
40%
50%
60%
Seed/Start up Expansion Replacement Buy out V. & O. purchase ofquoted shares
Number Amount
A.I.F.I.
1999 - Venture Capital vs Private Equity
1.631179237
147
130153
0 350 700 1.050 1.400 1.750
Private Equity
Venture Capital
Amount (Euro mln) Companies Investments
A.I.F.I.
1999 - % of amount invested by number of employees
36%
14%
24%
10%13%
10%14%
22%
8%
28%
5%
16%
0%
10%
20%
30%
40%
50%
0 - 19 20 - 99 100 - 199 200 - 499 500 - 999 > 1.000
Number Amount
A.I.F.I.
1998 - 1999: Sectoral distribution of investments by number
010203040506070
Indu
str. P
dts
Man
ifactu
ring
Other
Serv
.
Consu
mer re
l.
Financ
. Ser
v.
Constr
uctio
ns
Chemica
ls
Ind.
Autom
ation
Agricu
lture
Energ
y
Trasp
orts
Other
Commun
icatio
n/Tele
com
Inter
net
Compu
ter re
lated
Electro
nics
Health
care
Biotec
h
1999 1998
A.I.F.I.
High Tech Low Tech
% of amount and number of investments in the high tech sectors*
6%2%
9%7%
15%11%
30%18%
0% 4% 8% 12% 16% 20% 24% 28% 32%
1996
1997
1998
1999
Number Amount
A.I.F.I.
*High tech sectors: computer related, communications, other electronics related, medical/health related; biotechnology.
1999 - Sectoral distribution of amount invested in high tech
Biotech3%
Telecom: hardware4%
Internet14%
Communication: other9%
Health Care3%
Electronics11%
Computer related: software
11%
Computer related: other1%
Telecom: carriers44%
A.I.F.I.
1999 - Geographical distribution by % of numberand amount invested
90% 95%
9%4% 1% 0%
0%
20%
40%
60%
80%
100%
Italy Europe Other
Number Amount
A.I.F.I.
1999 - Italy: geographical distribution by % of amount and number of investments
53%
58%
29%
37%
18%
5%
0%
20%
40%
60%
80%
North Centre South+Islands
Number Amount
A.I.F.I.
1999 - Italy: regional distribution by number of investments
38
19 19 18
9 8 7 6 6 5 41 1
710
23
31
66
0
10
20
30
40
50
60
70
Lomba
rdia
Friuli V
.G.
Emilia R
.
Piemon
teLaz
io
Sarde
gna
Tosca
na
Veneto
Puglia
Mar
che
Sicilia
Liguria
Campa
nia
Calabr
ia
Abruz
zo
Moli
se
Basilic
ata N.A.
A.I.F.I.
Syndication by % of number of investments
23%
41% 41%
77%
59% 59%
0%
20%
40%
60%
80%
100%
Syndication No syndication
1997 1998 1999
A.I.F.I.
Number of investments by type of investors
93
40
15
60
50
23
19
42
93
62
55
107
0 11 22 33 44 55 66 77 88 99 110
Banks and banking financialoperators
Italian closed-end funds
International operators
Corporate/Private investors
Public operators
Co-operative financial operators
1998 1999
A.I.F.I.
Amount invested by type of investors (Euro mln)
187
280
84
301
75
17
547
159
811
132
100
31
0 300 600 900
Banks and banking financialoperators
Italian closed-end funds
International operators
Corporate/Private investors
Public operators
Co-operative financial operators
1998 1999
A.I.F.I.
1999 - Italian Private Equity Industry Concentration
A.I.F.I.
97,0%
85,7%77,5%
65,5%
46,6%
94,7%100%
35,6%
55,9%
69,0%
77,4%
89,0%
20,0%
40,0%
60,0%
80,0%
100,0%
5 10 15 20 25 30 35 40 45 50
Number of Investors
Mar
ket
Quo
ta
Invested Amount Number of Investments
1999 - Stage distribution of investments by type of investors
A.I.F.I.
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Seed/Start up
Expansion
Buy out
Replacement
Quoted shares
Banks and banking financial operators Italian closed-end fundsInternational operators Corporate/Private investorsPublic operators Co-operative financial operators
Divestment activity by number, and amount (at cost)
117176
126195
129
335
170
578
0
200
400
600
1996 1997 1998 1999
Number Amount (Euro mln)
A.I.F.I.
+72,4%
1999 - Distribution of divestments by number and amount
78
214
13
165
20
59
6 10
53
130
0
50
100
150
200
250
Trade sale Sale to other VCst-Fin.Inst.
IPO-Sale post Ipo Write off Other
Number Amount (Euro mln)
A.I.F.I.
1999 - Distribution of divestments by % of number and amount
46%
37%
8%
29%
12% 10%
3% 2%
31%
22%
0%
20%
40%
60%
Trade sale Sale to other VCst-Fin.Inst.
IPO-Sale post IPO Write off Other
Number Amount
A.I.F.I.
The EYVB Index (Ernst&Young Venture Backed Index)
A.I.F.I.
400,00
450,00
500,00
550,00
600,00
650,00
700,00
750,00
800,00
850,00
900,00
BISCI ItaIPO MIB30 MIBTEL MIDEX EYVB
EYVB
ItaIPO
MIB30BISCIMIBTEL
MIDEX
01-ott-99 22-mar-00
Number of divestments by type of investors
57
10
17
26
13
10
18
18
42
23
6
59
0 10 20 30 40 50 60 70
Banks and banking financialoperators
Italian closed-end funds
International operators
Corporate/Private investors
Public operators
Co-operative financial operators
1998 1999
A.I.F.I.
1999 - Stage distribution of divestments by type of investors
A.I.F.I.
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Trade sale
Sale to other VCst-Fin.Inst.
IPO-Sale post IPO
Write off
Other
Banks and banking financial operators Italian closed-end fundsInternational operators Corporate/Private investorsPublic operators Co-operative financial operators
Portfolio by number and amount (at cost)
1.100
935819
711
3.618
2.4171.807
1.400
0 1.000 2.000 3.000 4.000
Number of Companies
Amount (Euro mln)
1999 1998 1997 1996
A.I.F.I.
New funds raised (Euro mln)
735
1.069 1.051
2.207
0
500
1.000
1.500
2.000
2.500
1996 1997 1998 1999
A.I.F.I.
+110%
1999 - Sources of new funds by %
49%45%
6%
0%
20%
40%
60%
Parent Organisation Market Capital gain
A.I.F.I.
1999 - Sources of new funds raised on the market by %
25%
20%
14% 13% 12%10%
3% 4%
0%
10%
20%
30%
40%
Banks Funds ofFunds
Corporateinvestors
PrivateIndividuals
Pension unds InsuranceCompanies
Public Sector Other
A.I.F.I.
1999 - Fund raising targets
0%
10%
20%
30%
40%
50%
Early stage Expansion Buy Out Other
High Tech Low Tech
A.I.F.I.
21%
42%36%
1%
1999 - Geographical breakdown of total funds raised
Other2%
USA22%
Europe34%
Italy42%
A.I.F.I.
1999 - Geographical breakdown of funds raised from the market
Other4%
USA31%
Europe37%
Italy28%
A.I.F.I.
The industry performance:the sample
1990-1999 1989-1998 1986-1996
N° of operators in the sample 35 25 14
N° of operators actively investing in period 25 16 12
Total number of considered investments 202 172 100
Total cash out (Euro mln) 576 461 250
Average Investment size (Euro mln) 2,8 2,6 2,5
Total cash in (Euro mln) 1.607 1.140 622
A.I.F.I. AB CDKPMG Corporate Finance
The Industry Performance:the Pooled IRR
A.I.F.I.
0
1
1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999
1990-1999: IRR=40,3%
1989-1998: IRR=33,4%
1986-1996: IRR=31,2%
AB CDKPMG Corporate Finance
The Industry Performance:Pooled IRR 1990-1999 by type of investments
IRR32,0%
IRR40,8%
IRR43,7%
IRR47,0%
A.I.F.I.
Replacement Early Stage
ExpansionMBO/MBI
AB CDKPMG Corporate Finance
The Industry Performance:Pooled IRR distribution 1990-1999
Number of
Investments %
Write off/negative IRR 19 9%
0% - 10% 25 12%
10% - 30% 52 26%
30% - 100% 74 37%
> 100% 32 16%
Total 202 100%
A.I.F.I. AB CDKPMG Corporate Finance
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