the individual level. Another reason is that
for a private equity firm, it is much easier to
move around compared to a bank. A bank is
a much more regulated business that needs
a license to operate in every country, while a
private equity business can close shop and
relocate overnight.
Milan is attractive, but the environment in
Italy is not so conducive from a business
point of view.
Leaders League. In terms of European
hotbeds for private equity, where in your
view does Italy rank today?
M.D.B. Italy is near the bottom of the list
in Europe if you look at the private equity
volume to GDP indicator. UK (0.43%),
France (0.39%), Germany (0.25%) and even
Spain (0.15%) rank higher than Italy, where
private equity investments as share of GDP
stands at only 0.11% according to Statista.
Traditionally, private equity activity has not
been as large in terms of market size as that
observed in other European countries. A key
reason is the size of the businesses – Italy is
an economy where small to medium sized
businesses provide a much higher percen-
tage of the overall GDP than most other Eu-
ropean markets.
If one wants to operate in the large to
mega deals category, Italy will not be
very attractive. So while in Italy there
are quite a large number of deals, they
tend to be smaller. The dollar amount is
typically less than €100 million and bu-
sinesses are usually family owned or close
partnerships. But it is a profitable market,
and for Carlyle it has been a very attrac-
tive market in terms of returns.
Leaders League. Carlyle has recent-
ly raised $3 billion for Carlyle Global
Partners which is said to have a lifespan
of roughly 20 years – double the Carlyle
convention. Is this a permanent shift in
strategy, and is this likely to be reflected
in new European funds as well?
M.D.B. As mentioned earlier, today Carlyle
is a big group with circa $200 billion of as-
sets under management. It’s not only a pri-
vate equity manager, but is really an alter-
native investment manager. We have funds
that are dedicated by geography and funds
in some cases specialized by industry. We
saw that there is a demand on the side of the
investors on the one hand and there might
be investment opportunities on the other
that might not fit exactly the same profile in
terms of timing of the traditional model.The creation of this fund should be seen as
an additional product, a complement to our
existing mix – as opposed to an indication
that everything will move in that direction- that tries to capture a segment of the mar-
ket both from the investors’ side as well as
the investment opportunity. We continue
to have our traditional funds that have a
5-plus-5-year life cycle, and I don’t think
this will change.
Leaders League. Could you tell us a little
bit more about your current fundraising
efforts in Europe as well as the most re-
cent successful exits that you have had?
M.D.B. At Carlyle, we have a large number
of funds and on a regular basis there are
funds that are raised. Concerning our Euro-
pean business, the last fund (Carlyle Europe
Partners IV) was fully raised in 2015. We are
currently in the middle of investing our four-
th European fund.Recent exits in Europe were the sale of a ma-
jority stake in B&B hotels to PAI, the sale of
Sermeta, and the sale of RAC to CVC Capital
Partners for realized returns of 2.0x, 3.3x
and 3.8x, respectively. The firm also sold its
stake in Telecable for a 2.8x return and a
33% IRR.ITALY IS AN ECONOMY
WHERE SMALL TO
MEDIUM SIZED
BUSINESSES PROVIDE
A MUCH HIGHER
PERCENTAGE OF THE
OVERALL GDP THAN IN
MOST OTHER EUROPEAN
MARKETS