Quadrivio to launch Made in Italy Fund 2

One more bet on Italian excellence, although this time the stakes are higher. After the successes scored by the Made in Italy fund with brands such as Dondup or Gcds, Quadrivio group is ready to kick off another round of investment through Made in Italy fund 2. «The first one had a liquidity of 300 million euros, while this one has a target collection of 500 million,» Alessandro Binello, ceo and co-founder of the private equity firm, explained to MFF. Through this investment, the company makes an encore in the Italian high-end sector, focusing from fashion to design, beauty to food&wine, but with a twist. «We will always be linked to the territory, but 30% of the fund’s exposure will cover companies producing in Italy or that have strong ties to the country, even foreign ones,» the Manager specified, anticipating to MFF that there would already be five potential deals in the crosshairs, with no limit related to turnover or size. Growth rates will in fact be the main criterion that will guide the evaluation process. «Promising companies with big increases and run by ambitious management are obviously our favorites. They must have a special feature through which they are developing,» Binello confirmed.

You announced the launch of the Made in Italy Fund 2 just over a year ago at MFF itself. How is the fundraising going?

It is going very well, based on the fact that the first is performing very well. All our current investors have basically confirmed their trust in us, and they will also back us in the new fund. If they invested something in the first one, they doubled on the second one. In fact, the first one had a liquidity of 300 million euros, which we invested in two and a half years, while this one has a target funding of 500 million and we plan to invest it just as quickly. In addition, we have also strengthened the team with four new additions that we will announce shortly.

There are changes within the Group as well, then.

We have an important French partner with more than 30 years of experience in this field, which we will unveil in the first weeks of June. We will open an office in Paris that will serve the whole Quadrivio group, but it will have a special focus on the luxury world. The reason why we have strengthened ourselves in Paris, but in London or New York as well, is precisely to act as an aggregator in the luxury sector, in Italy and beyond.

Despite the name of the fund, will it be dedicated to international companies as well?

Many foreign companies produce in Italy. Even though we will always be tied to the territory, a 30% of the fund’s exposure will cover possible foreign companies that produce in Italy or have strong ties to the country. The strategy however does not change, as 70% will be focused on Italy. Even the first fund had this «openness», then we actually favored Italy completely for strategic reasons.

Do you already have potential targets?

The themes are basically the same as the previous fund, so fashion, design, food&wine and cosmetics, with a focus on Smes. We have already found five operations that we are pursuing. I cannot anticipate anything, but the advantage is that we are dealing exclusively with these entities.

Have you set specific criteria for yourselves? A minimum turnover?

Turnover is not important for us, growth rates are. The companies experiencing big increases and are run by an ambitious management are obviously our favorites. We look for companies that are growing regardless of general macro factors because they are at a moment of major growth and at some point they need a company like ours to make the leap.

What would be the main advantaged for the companies after concluding this transaction?

Certainly, our knowledge of the international distribution network. It is important to be well distributed, although the concept is often underestimated. We bring a very strong expertise that has also been consolidated in recent years with the first fund, which has seen important success stories, such as Autry, Dondup, Mohd, or Gcds, that have grown so much, the latter especially in terms of notoriety. We also have considerable experience in digital, a channel that is currently under-appreciated by the stock exchanges but which we still see as growing strongly. For this reason, we have a lot of investment within the subsidiaries in the digital channel, we are very focused on this because, in our opinion, it will be an important distribution channel. We also bring experience in strengthening management and in choosing people because we have actually managed to attract talent with experience in much larger companies. Then, our internationalization is also important. We have offices all over the world, such as the one in Miami, with people who basically only deal with fashion. America is an area we cover very well, and also Asia, although we operate with a number of partners. Therefore, we have the conditions to do well this time too.

The latest investment is Pt Torino for Made in Italy fund 1. You have launched a takeover bid on the parent company, Cover50…

The operation seems to me to be going very well. We have clear ideas on what we want to do, it is still soon, but I think there are all the conditions to do well. We had prepared this operation for some time in terms of industrial logic, and we are happy so far. Clearly, we will then have to rely on the results. The goal is to make Pt Torino much bigger by preserving its characteristics that made the brand successful, while giving it the possibilities and tools to develop further. This is our job, basically. It is simple in concept, not always easy in practice.

Other investees include fashion brands such as Dondup and Gcds. How have they evolved since your entry?

Dondup has grown a lot, although there were no positioning issues to achieve, but rather product and distribution development. The main objective was foreign growth, and we are succeeding. With Gcds, we worked a lot on brand awareness and today, if you look at the online platforms, it is the one that has grown the most even compared to the big luxury brands. We wanted to communicate an evolution of the designer from a streetwear perspective to a more complete collection. We expanded the range and development women’s wear, which has grown a lot.

What other brands have given you the greatest satisfaction?

I want to emphasize the story of Autry, a footwear company that will touch 40 million in ebitda this year. A remarkable result given that, in 2022, its Ebitda was 27 million with 84 million in revenues. Today, the turnover is expected to reach nearly 120 million. These success stories need to be replicated.

Are you already thinking about a third fund?

For now, we will concentrate on the second and selling the first well, so we have already a lot to do. We take these paths to structure the companies and make them go higher, trying to control the risk by doing as much majority operations as possible. This is not because we want to prevail over the companies we take over, but to be able to attract the best talent by guaranteeing them an important role in the company. However, in my opinion, there is a lot to invest even more in this sector in the future, both in Italy and abroad. For us, it is one of the most interesting ones, but it is also true that you need to have a specialized team because it has very different logistics. You buy intangible assets, such as the personal ability of people on a creative level, and the sensitivity to understand the brand and the market. The sector is very specialized, and I understand that this is a bit scary. (All rights reserved)