Giovanni Amodeo hosted a fireside chat with Barbara Ellero, Partner and Head of Private Debt at Anthilia Capital Partners, to explore the evolving landscape of Italian private credit. The discussion covered various aspects of the market, from its inception to current trends and future prospects.

Background and Role:Barbara Ellero shared her journey, highlighting her role at Anthilia Capital Partners, an independent asset management company founded in 2007. She joined the firm in 2013, coinciding with Anthilia’s entry into the private credit space. Since then, the company has delivered approximately €1.6 billion to the Italian economy through 120 transactions, focusing on the lower mid-market.

Evolution of Private Credit in Italy:Ellero discussed the development of private credit in Italy over the past 12-15 years. She noted that the market has experienced several cycles, with the most recent years marked by market dislocation and macroeconomic headwinds. Despite these challenges, smaller companies have shown remarkable resilience, making the lower mid-market an attractive investment space.

Italy’s Unique Market Landscape:Italy’s industrial landscape, characterized by a high prevalence of small and mid-sized enterprises (SMEs), presents unique opportunities for private credit. Ellero emphasized that many of these SMEs are innovative and ambitious, making them ideal targets for investment. The traditional reliance on banking relationships is gradually shifting, creating more opportunities for alternative lenders.

Role of Banks and Competition:Ellero highlighted the complementary role of banks and private credit providers. While banks continue to play a crucial role, private credit offers flexible and bespoke financial solutions that are often necessary for complex transactions. She also discussed the collaborative relationship between private credit and private equity, noting that both sectors can work together to optimize deals.

Investment Strategies and Opportunities:The conversation delved into Anthilia’s investment strategies, focusing on both sponsor-led and sponsor-less deals. Ellero explained that while sponsor-less deals are more challenging, they offer significant value creation opportunities. She also discussed the importance of having a strong network of advisors to identify and execute deals.

Sector Specialization and Geographic Focus:Ellero expressed a preference for remaining a generalist in private credit, leveraging the expertise of specialized private equity partners. She also emphasized the importance of being local when investing in the lower mid-market, as understanding the nuances of the local market is crucial for success.

Future Prospects and Challenges:Looking ahead, Ellero discussed the potential for scaling operations through joint ventures or acquisitions to meet investor demand for pan-European funds. She also touched on the importance of talent acquisition, particularly from the advisory field, to support the growth and success of private credit operations.

Conclusion:The fireside chat provided valuable insights into the trends and dynamics of Italian private credit. Barbara Ellero’s expertise and experience highlighted the resilience and potential of the lower mid-market, as well as the collaborative opportunities between private credit and private equity.

Key timestamps:

00:07 Introduction to the Fireside Chat
02:52 Evolution of Private Credit in Italy
05:40 Attractiveness of Italy for Investors
08:29 Opportunities and Challenges in Private Credit
10:30 Role of Banks in Private Credit
13:09 Building Partnerships in Private Equity
15:27 The Importance of Advisors in Deal Flow
17:15 Specialization vs. Generalization in Private Credit
19:23 Scale and Asset Management in Private Credit
21:03 Talent Acquisition in the Industry
23:54 Interest Rate Concerns and Portfolio Management
25:11 Impact of Tariffs on Portfolio Companies
26:43 Investor Concerns and Market Dynamics
29:00 Conclusion and Closing Remarks