In a recent fireside chat, Andrea Pescatori, CEO of Ver Capital, discussed the outlook on private credit in the Italian market. The conversation touched on various topics, including the background of Ver Capital, the size of their funds, the outlook of the Italian private credit within the European market, and the regulatory environment in Italy.

Pescatori highlighted that Ver Capital operates in four business areas: European yield, European leveraged loans, private debt, and special situations. The company manages about half a billion each in private debt and leveraged loans, and around 300 million in liquid strategies.

Discussing the outlook for private credit, Pescatori noted that the asset class is becoming increasingly attractive due to rising interest rates. He also pointed out the growing presence of shadow banking in Europe, mirroring trends seen in the US. In Italy, Pescatori sees significant potential for growth in shadow banking and private credit activities due to the retrenchment of banks from medium-term financing.

On the regulatory front, Pescatori mentioned that Italy has made significant strides in recent years, making it easier for international fund managers to carry out lending activities in the country. He also highlighted the recent reforms in Italy’s insolvency law, which he believes makes the country one of the most investor-friendly in Europe.

Pescatori also touched on the talent pool in private credit, stating that there is a lot of talent around, but it’s crucial to merge those talents coming from different angles to create a well-rounded team. He also discussed the democratization of private assets, noting that while there is a trend towards this in private equity, it’s still relatively low in private credit due to a lack of penetration and awareness.

Overall, Pescatori’s discussion provided valuable insights into the private credit landscape in Italy and Europe, highlighting the opportunities and challenges in the sector.

Timestamps:

00:08: Introduction
00:34: Background and Formation of Ver Capital
01:34: Size and Organization of the Funds
02:20: Outlook on Private Credit in Europe and Italy
04:00: Comparison of European and Italian Market Trends
04:58: Italy’s Position in the European Market
06:58: Differentiation and Trends in Private Credit
08:00: Regulation and Market Trends in the UK
08:45: Regulation and Market Trends in the Rest of Europe
09:55: Regulatory Changes in Italy
11:59: Barriers to Entry and Competition in Italy
14:10: Competition and Uniqueness of Capital
16:53: Confidentiality and Borrower Perception
18:40: Bullish Strategies and Special Situations
21:56: Legal Framework and Investment Strategy
23:40: Investment Criteria and Red Flags
24:52: Expanding Investor Base in Europe
25:23: Target Investors and Market Penetration
26:26: Investor Interest and Liquidity Preferences
27:15: Strategies to Attract International Investors
28:51: Challenges of European Market and Investment Approach
30:25: Appealing Factors for International Investors
32:11: Recruitment and Talent in Private Credit
35:23: Democratization of Private Credit
37:47: Market Penetration and Investor Interest