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Solidarieta Veneto makes first PE investment with independent fund

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Solidarieta Veneto Fondo Pensione, the €914.3m pension fund for blue-collar workers in the Veneto region of Italy, has committed €7m to the Assietta Private Equity III fund (APE III).

It is the second private equity investment by the pension fund, following last February’s €7m investment in Fondo Sviluppo, a local private equity fund managed by FVS sgr.

However, the stake is Solidarieta Veneto’s first investment in a private equity fund managed by an independent private equity firm.

Fondo Sviluppo is backed by two local government investment funds, Veneto Sviluppo and Friulia.

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In tandem with investing in bonds issued by unlisted companies, Solidarieta Veneto decided two years ago to invest 5% – around €30m – of its two long-term sub-funds, mixed income and dynamic, in private equity investments.

Paolo Stefan, director at Solidarieta Veneto, told IPE: “We started investing in private markets to improve the balance of our asset allocation via investments that reduce volatility and risk through diversification, leading to value creation in the medium and long term.”

It selected APE III with the help of an external adviser after a search through all Italian closed-end funds investing in unlisted companies.

Stefan added: “APE III contains elements that fit well with the investment philosophy we are looking for – a medium-sized private equity fund; investments in small and medium-sized projects, with growth expectations even at international level achieving the goal of optimising the financial structure of businesses; and a limited use of leverage.”

APE III has raised €50m to acquire stakes as lead or qualified minority investor in small and medium-sized businesses in the Italian industrial sector, with a turnover €15m-50m.

Investments will normally be €3m-8m.

The fund has already invested in Technical Plast, which designs and manufactures precision moulds and high-tech engineering plastics components.

Solidarieta Veneto is expecting a return from APE III greater than a comparable investment in listed shares over the same period.

As at 30 June, the pension fund’s overall return for the year to date was 2.68%.

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