International Corporate Finance

INTERNATIONAL CORPORATE FINANCE 50 LEADERS

Leaders League. What is Carlyle’s invest-

ment strategy in Europe, and how is this

reflected in its operating structure?

Marco De Benedetti. The Carlyle Group is

a large alternative asset manager which has a

number of different products, including the

traditional buyout and private equity – the

DNA of Carlyle.

Many of the other players, notably the Ame-

rican ones, have set up base in London and

try to cover the continent from there. With

such a strategy, in most instances you end

up having your domestic market (the UK)

representing 60-70% of your activity, with

the rest of Europe being only bits and pieces.

What we have focused on since the very

beginning, is having a truly pan-European

operation, and this is what we done very ef-

fectively over the last 17 years – a well-diver-

sified European product. We have a network

of offices with a strong operational presence

in each of the five key countries: the UK,

France, Germany, Italy and Spain. As a result

of this, the UK, France and Germany each

typically have a 25-30% share in our Euro-

pean activity, while Italy and Spain account

for 10-15% each.

This combination of strong local capabili-

ties together with the global platform is our

unique strategic position. In our view, if you

don’t have a local presence you will not be

able to adapt to the market, because you

need to build relationships. Just flying in and

out of London is much harder compared to

having people on the ground that speak the

same language.

Leaders League. What does the Brexit

hold for the European Private Equity mar-

ket and for Carlyle?

M.D.B. It is too early to tell, because no one

is in a position to have a precise view of what

the Brexit really means from a practical point

of view and how it will unfold. There are a

number of different ways forward, and how

the UK will negotiate with Europe might

have an impact.

The Brexit started to have an impact in Q2

2016. There was a very dramatic slowdown
      in activity in the UK with a lower volume
      of sponsor driven transactions – everyone
      stood on the sidelines and nobody was wil-
      ling to commit to a deal before knowing
      where the referendum was going. The reason
      behind this was that people were not willing
      to factor in all the uncertainties, including
      currency.

Looking ahead, the referendum vote should

not make the UK market less attractive from

a private equity standpoint. The slowdown

in activity was only in anticipation of the

vote. Now the vote has taken place, we ex-

pect the market to adjust.

We still believe that the UK will continue to

be a large attractive market in the medium

term and we are evaluating a few opportuni-

ties right now.

So financial services, which is not one of the

main sectors in which our Europe buyout

fund operates, is potentially the one which

may be more affected by the Brexit, and this

is where the UK might lose the most by not

being part of the European Union.

Leaders League. The talk has been about

increased presence of banks and private

equity firms in Paris and Frankfurt in the

wake of the Brexit. Do you see similar

trends for Milan as well?

M.D.B. For the time being I think it’s only

talk and there’s not a very high likelihood of

this happening. For businesses in the asset

management space, including private equity,

taxes are a more important consideration

than Brexit. From a tax regime perspective,

the UK is attractive at both the corporate and

Carlyle follows a pan-European investment strategy to offer a truly diversified European

product to its investors. To ensure the success of its strategy, the alternative asset

management powerhouse has established a network of offices in five key countries,

namely the UK, France, Germany, Italy and Spain, with investments in the UK typically

representing not more than 25-30% of European buyout activity.

“Italy is a market dominated by sub $100

million buyout deals and local presence

is necessary to build relationships”

MARCO DE BENEDETTI

Managing Director and Co-Head

of European Buyouts,

THE CARLYLE GROUP

EXPRESS BIO

Marco De Benedetti is a Managing Director

and Co-head of the Europe Buyout advising

group. He joined The Carlyle Group in 2005

with responsibility for Italian buyouts, and

has been co-heading European activities

for the last six years. Marco has been

actively involved with Carlyle’s investment

in Moncler, CommScope and NBTY. Prior

to joining Carlyle, Mr. De Benedetti was the

Chief Executive Officer of Telecom Italia.

Marco received his bachelor’s degree in

history and economics from Wesleyan

University, and his MBA from the Wharton

School at the University of Pennsylvania.

Assets Under Management

$176 billion

Professionals

1,650

Offices

35