SINGAPORE – Singapore’s global investment company Temasek is expanding its opportunities in Italy by forming a strategic partnership with Italian growth equity investor FSI, which is also the largest fund in Europe dedicated to a single country.
Temasek said on Sept 28 that it has acquired a 9% strategic minority stake in FSI’s management company. Temasek will also commit additional capital to FSI’s future funds, it said.
FSI has about €5 billion (S$7.28 billion) managed by its team.
This new partnership also builds on Temasek’s presence in Italy, where it has invested for over a decade. Temasek holds direct and indirect interests in companies including luxury fashion retailers Ermenegildo Zegna Group, Golden Goose and Moncler.
Temasek has also been a significant investor across FSI’s previous funds and is an investor in its scale-up capital solutions fund which focuses on Italian high-growth small and medium-sized enterprises (SMEs).
The new strategic partnership between Temasek and FSI further deepens the Singapore company’s exposure to Italy’s mid-market, Temasek said.
The mid-market in Italy is the backbone of its national economy. It refers to businesses with revenue of between €70 million and €200 million, and earnings before interest, taxes, depreciation and amortisation of €10 million to €30 million.
These are typically family-owned, export-oriented niche leaders. They are also companies with strong industrial capabilities and international reach, Temasek noted. Many of these companies are also approaching a new phase of growth or succession.
Italy has around 10,000 of these companies, of which only around 10% have brought in an institutional equity investor or listed on a stock exchange, Temasek added.
“The expanded relationship creates more avenues for Temasek to work with FSI over time as a minority shareholder, and an investor in its funds,” it said.
“FSI will also be able to strengthen its position to capture the depth of the opportunity within the Italian mid-market and with SMEs, where companies require substantial equity capital and a partner that can help to accelerate their international growth.”
In its last annual report released in July, Temasek said that around 12% of its portfolio is exposed to the Europe, Middle East and Africa region, with most of it in Europe.
Nagi Hamiyeh, president of Temasek Global Investments, said: “Italy is an integral part of Temasek’s Europe strategy.
“Over more than a decade, we have built our portfolio and networks steadily, and stepped up the pace in recent years. Our partnership with FSI extends that into the mid-market.”
He added that Temasek can draw on its sector capabilities and global networks to help Italian companies expand into new markets and realise their long-term growth ambitions.
“We engage companies’ boards and management on strategy and governance, while leaving day-to-day operations to them, and can participate directly as they scale,” he said.
Maurizio Tamagnini, FSI chief executive and managing partner, said that Temasek has been a founding investor in its funds, and both teams are looking at where value can be created in Italian companies of different scales.
“Italy is home to some of Europe’s most remarkable SMEs, and FSI has become the bridge through which the world’s leading institutional capital reaches them,” he said.
“Temasek’s presence alongside our partners sharpens that ambition further, and it is the ground on which we will build the next phase of FSI.”
Barnaba Ravanne, FSI co-managing partner and chairman of the investment committee, said the partnership with Temasek – a high-profile global investor – will act as an accelerator of the international growth of the businesses that FSI invests in.
“For Italy, it confirms that a single-country strategy, executed with discipline and in genuine partnership with entrepreneurs and corporates, can deliver first-quartile returns at scale.”
In Europe, Temasek has offices in Brussels and London.
Apart from those, it also has offices in Beijing, Hanoi, Mumbai, Shanghai, Shenzhen and Singapore in Asia; and Mexico City, New York, Paris, San Francisco and Washington, DC outside Asia.
