The Italian Private Equity and Venture Capital market in 2006 1
The main industry trends in 2006 full members Fund Raised +15% +69% Amount invested +22% Amount divested +95% 2005 2006 2005 2006 2005 2006 2005 2006 2
The Italian Private Equity and Venture Capital market in 2006 Players Fund Raising Investments The economic impact of Private Equity Private Equity and SMEs Divestments 3
Full Members and players Full Members Players analysed 132 108 110 106 111 98 97 92 77 79 82 2002 2003 2004 2005 2006 March 2007 4
Italian market players in 2006 Early stage funds Regional/pub. players Country funds Italian banks Pan-European players Italian closed end funds (SGR) 31% 8% 10% 12% 18% 21% 5
Players distribution by investment stage 2005 2006 54 +23% 39 47 +21% 44 13 17 +31% 15 21 +40% Replacement Early Stage Expansion Buy out 6
Portfolio at 31 st December 2006 11.186 1.074 Companies Portfolio at 31st December 7
Portfolio structure: distribution by target companies turnover (Euro mln) 150 249 1.074 102 166 388 18 Total companies Foreign companies Italian companies with turnover > 50 Italian companies with turnover 30-50 Italian companies with turnover 10-30 Italian companies with turnover 0-10 NA 8
Funds available for new investments 6.067 5.160 Resources of Italian players (Euro Mln)* * Not considering captive and public players ** Estimate of resources for new investments in Italian companies Resources of Pan-European players based in Italy (Euro Mln)** 9
The Italian Private Equity and Venture Capital market in 2006 Players Fund Raising Investments The economic impact of Private Equity Private Equity and SMEs Divestments 10
Annual funds raising activity (Euro Mln) 2.275 1.996 1.937 +69% 1.663 1.345 2002 2003 2004 2005 2006 11
Funds raising activity by source in 2006 (Euro Mln) 3.817 1.542 2.275 1.454 85 736 Capital gains Amount raised by captives Independent funds raised New funds raised Invested amount by pan-european players based in Italy 12
New funds raised on the market (Euro Mln) +63% 1.454 Other 593 1.478 1.252 777 SGR 894 861 2002 2003 2004 2005 2006 13
Geographical breakdown of new funds raised Italy (Euro Mln) Abroad (Euro Mln) 721 350 544 733 2005 2006 14
Geographical breakdown of new funds raised by sources Italy Abroad 79% 43% 31% 12% 9% 5% 4% 4% 4% 1% 1% 0% 2% 1% 1% 1% 0% 1% Banks Individual Inv. Funds of funds Pension funds Endowements and Found. Insurance Comp. Public sector Capital gains Other 15
Distribution by sources of new funds raised 2005 2006 42% 34% 22% 16% 14% 11% 12% 12% 8% 8% 5% 1% 3% 2% 3% 1% 0% 5% Funds of funds Banks Individual Inv. Pension funds Insurance Comp. Endowements and Found. Public sector Corporate Investors Other 16
Funds raising expected allocation Early Stage H-T Early Stage Non H-T Expansion Buy out Other 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 2002 2003 2004 2005 2006 17
The Italian Private Equity and Venture Capital market in 2006 Players Fund Raising Investments The economic impact of Private Equity Private Equity and SMEs Divestments 18
Investment activity Number Companies Amount (Euro Mln) +22% 3.731 3.034 3.065 2.626 1.480 301 254 336 266 248 208 281 241 292 245 2002 2003 2004 2005* 2006* * The figure concerning the amount invested includes (above the broken line) the activity of players not based in Italy. 19
Investment distribution by stage in 2006 105 Amount (Euro Mln) 2.444 100 Number 62 1.094 25 28 165 Expansion Buy out Early stage Replacement 20
Investments distribution by type of investor in 2006 1.858 Amount Number 84 69 55 34 872 736 29 21 214 44 7 Pan-European funds Italian banks SGR Country funds Regional/pub. investors Early stage funds 21
Average invested amount by stage in 2006 Amount (Euro Mln) Amount excluding large and mega deals (Euro Mln)* 24,4 12,8 10,4 15,1 8,5 7,7 6,6 0,5 Totale mercato Expansion Buy out Replacement Early stage * Investments with an amount included between 150 and 300 million of Euro (large deals) or larger than 300 million of Euro (mega deals) 22
Invested amount by deal size Amount of large and mega deals (Euro Mln)* Amount of small and medium deals (Euro Mln) 1.348 1.001 753 1.715 1.873 1.319 335 1.145 2.064 2.383 2002 2003 2004 2005 2006 * Investments with an amount included between 150 and 300 million of Euro (large deals) or larger than 300 million of Euro (mega deals) 23
Early stage investments Number Companies Amount (Euro Mln) 49 48 65 65 54 59 50 56 62 57 43 36 23 30 28 2002 2003 2004 2005 2006 24
Distribution of early stage investments by investor type in 2006 (number) 53% 16% 11% 3% 3% 13% Country Funds SGR Pan-European players Italian banks Early stage funds Regional/Pub. Players 25
Expansion investments Number Companies Amount (Euro Mln) 1.094 806 583 458 413 175 137 122 139 126 111 135 121 105 94 2002 2003 2004 2005 2006 26
Distribution of expansion investments by investor type in 2006 (number) 31% 24% 16% 12% 10% 6% Pan-European players Early stage funds Country funds SGR Italian banks Regional/Pub. Players 27
Buy out investments Number Companies Amount (Euro Mln) 2.258 2.401 2.444 1.550 916 76 46 59 48 48 75 64 100 40 69 2002 2003 2004 2005 2006 28
Distribution of buy out investments by investor type in 2006 (number) 55% 20% 15% 10% Country funds Italian banks Pan-European funds SGR 29
Distribution of buy out investments by size (number) 2005 2006 70% 58% 36% 28% 6% 2% Small (0-14,9 Euro Mln) Medium (15,0-150,0 Euro Mln) Large and Mega (>150,0 Euro Mln) 30
Average leverage (debt/equity) by buy out size 2,20 1,85 1,80 1,60 Small (0-14,9 Euro Mln) Medium (15,0-150,0 Euro Mln) Large and Mega (>150,0 Euro Mln) Total 31
Distribution of initial and follow on investments by number Initial Follow on 52% 47% 48% 44% 40% 48% 53% 52% 56% 60% 2002 2003 2004 2005 2006 32
Distribution of initial investments by stage and sectors in 2006 (number) Expansion Buy out Replacement Early stage 7% 21% 34% 38% Ind. Prod. & Serv. Consumer Food & Beverage Manufacturing Other serv. Medical Ener. & Util. Other 27% 15% 11% 8% 8% 9% 11% 11% 33
Geographical distribution of investments in 2006 (number) 6,8% 71,9% Italy 93,2% 2,1% 4,5% 14,7% NA South and Islands Centre North Abroad 34
Geographical distribution of investments in 2006 (amount) 1,1% 86,3% Italy 98,9% 0,1% NA 2,4% South and Islands 10,1% Centre North Abroad 35
Average invested amount by geographical area (Euro Mln) 9,4 8,8 6,8 North* Centre South and islands * Excluding large and mega deals 36
Regional distribution by number of investments in 2006 96 31 27 22 19 19 17 6 11 8 7 4 2 2 1 Lombardia Friuli V. G. Emilia R. Piemonte Lazio Veneto Toscana Trentino A. A. Campania Marche Liguria Puglia Sardegna Calabria NA 37
Textile Other Consumer goods Medical Serv. (other) Manufact. Transport. Computer Construction Food & Beverage Retail Media & Ent. Biotech Financial serv Electronics Energy&Ut. Automotive Luxury Aerospace Chemicals Ind. Aut. 40 35 30 25 20 15 10 5 - Sectoral distribution by number in 2006 38 Ind. Prod.
Investments distribution in high tech companies Number Amount 2002 12% 36% 2003 7% 31% 2004 5% 27% 2005 10% 22% 2006 7% 28% 0% 10% 20% 30% 40% 39
Sectoral distribution of investments in high tech companies in 2006 (number) Computer Medical 17% 19% Biotech 12% Electronics 10% Media & Ent. 6% Industrial Prod. & Serv. Energy & Utilities Automotive Aerospace Manufacturing Industrial Automation 4% 4% 2% 2% 1% 1% Other 21% 0% 10% 20% 30% 40
The Italian Private Equity and Venture Capital market in 2006 Players Fund Raising Investments The economic impact of Private Equity Private Equity and SMEs Divestments 41
Sales and employees of venture backed companies 2005 2006 143.521 106.758 24.264 30.415 Sales (Euro Mln) Employees 42
Estimate of new jobs created by venture backed companies 2006 2009 181.038 +37.517 143.521 111.017 +19.112 91.905 70.021 +18.405 51.616 Venture Capital (Early stage + Expansion) Buy out (Buy out + Replacement) Total Fonte: s elaboration on The economic impact of Private Equity and Venture Capital in Italy 43
The Italian Private Equity and Venture Capital market in 2006 Players Fund Raising Investments The economic impact of Private Equity Private Equity and SMEs Divestments 44
Distribution of investments (number) by target companies employees 17% 3% 6% 6% 14% 24% SMEs 71% 30% 0-19 20-99 100-199 200-249 250-499 500-999 > 1.000 45
Distribution of investments (number) by target companies turnover (Euro Mln) 12% 22% 10% 7% 17% SMEs 66% 32% 0-2 2-10 10-30 30-50 50-250 > 250 46
Distribution of investments (number) by stage financing and geographical area (companies < 250 employees) Expansion Buy out Replacement Early stage 30% 35% 7% North Centre South and Islands Abroad NA 28% 6% 8% 3% 15% 68% 47
The Italian Private Equity and Venture Capital market in 2006 Players Fund Raising Investments The economic impact of Private Equity Private Equity and SMEs Divestments 48
Divestment activity Number Companies Amount (Euro Mln) +95% 1.763 868 906 598 647 143 122 222 194 137 150 181 110 131 151 2002 2003 2004 2005 2006 49
Distribution of divestments by way out (number) 2005 2006 47% 38% 17% 22% 11% 13% 6% 10% 19% 17% Trade sale Sale to VC-Fin. Inst. IPO - post IPO Write off Other 50
Distribution of divestments by way out (amount) 2005 2006 49% 39% 32% 31% Sale to VC-Fin. Inst. 17% 10% 11% 4% 5% 2% Trade sale IPO - post IPO Write off Other 51
Performance of the venture backed companies listed on the Italian Stock Exchange 03/ 06 04/ 06 05/ 06 06/ 06 07/ 06 08/ 06 09/ 06 10/ 06 11/ 06 12/ 06 01/ 07 02/ 07 MIBTEL S&PMIB EYVB 52
Distribution of divestments by type of investor (number) 29% 28% 22% 12% 1% 8% Early stage funds Country funds Pan-European players Italian banks SGR Regional/Pub. players 53
Distribution of divestments by way out and type of investor (number) Italian banks Country funds Early stage funds Pan-European players Regional/Pub.players SGR 32% 40% 17% 17% 19% 26% 33% 5% 45% 45% 18% 13% 22% 6% 11% 6% 3% 9% 4% 10% 25% 35% 33% 26% Trade sale Sale to VC-Fin. Inst. IPO - Post IPO Write off Other 54
Distribution of divestments by way out and type of investor (amount) Italian banks Country funds Early stage funds Pan-European players Regional/Pub. players SGR 39% 17% 20% 43% 47% 4% 43% 1% 19% 5% 71% 18% 34% 24% 8% 33% 3% 9% 19% 10% 12% 22% Trade sale Sale to VC-Fin. Inst. IPO - Post IPO Write off Other 55
Distribution of divestments by original investment (number) 46% 28% 17% 9% Replacement Early stage Buy out Expansion 56
The Italian Private Equity and Venture Capital market in 2006 57