Giovanni Amodeo hosted a fireside chat with Stefano Ferraresi, Partner and Member of the Management Committee at BC Partners, to discuss trends in European mid-market investing. Here are the key topics and insights from their conversation:

Background and Role at BC Partners: Stefano Ferraresi shared his career journey, starting in investment banking at Merrill Lynch and transitioning to BC Partners in 2002. He highlighted his responsibilities, including leading investments in the industrial sector and overseeing investments in the Italian market.

Definition and Attractiveness of the Mid-Market: Ferraresi defined the upper mid-market as transactions with equity values between €200 million and €600 million. He emphasized the attractiveness of this segment due to its broad deal flow, lower competition, and greater opportunities for value creation through operational improvements and scaling.

Complexity and Local Presence: He discussed the complexity of finding deals in the mid-market, which often requires local presence and strong relationships. Ferraresi noted that BC Partners’ long-standing local operations in Europe give them a competitive edge in sourcing and executing deals.

Exit Strategies: Ferraresi highlighted the importance of strategic buyers in achieving successful exits, noting that strategic interest often leads to higher exit multiples. He mentioned that while IPOs are becoming less preferred due to their complexity and narrow windows, strategic sales and secondary buyouts remain viable options.

Role of AI in Deal Sourcing: While acknowledging the potential of AI to facilitate deal sourcing, Ferraresi stressed that personal relationships and local networks will continue to be crucial in identifying and securing investment opportunities.

Co-Investments: Ferraresi discussed the growing demand for co-investments from LPs, which allows them to reduce costs and have more control over their investments. He highlighted BC Partners’ successful co-investment program, which provides flexibility and enhances returns for their investors.

Secondary Market and Continuation Funds: He observed an increase in secondary market activity and the use of continuation funds as tools for managing exits, especially in challenging market conditions.

Future Outlook: Ferraresi expressed optimism about the increase in exit activity in 2025, driven by supportive debt markets, improved economic conditions, and a backlog of deals. He also noted the trend towards greater sector specialization within BC Partners.

Conclusion: The fireside chat provided valuable insights into the dynamics of the European mid-market, the importance of local presence and relationships, and the evolving strategies for sourcing and exiting investments. Ferraresi’s expertise and experience highlighted BC Partners’ strategic approach to navigating the complexities of mid-market investing.

Key timestamps:

00:09 Introduction to ION Influencers Fireside Chats
00:41 Stefano’s Background in Investment Banking
02:27 Defining the Mid Market in Europe
03:28 Attractiveness of the Upper Mid Market
08:00 Exit Strategies: Secondary Buyouts vs IPOs
12:35 The Role of AI in Deal Sourcing
14:14 Local Presence and Perception in European Markets
16:50 Trends in Co-Investments
20:06 The Rise of Secondary Markets
20:47 Continuation Funds as an Exit Strategy
21:34 Predictions for Future Exits
22:07 Market Conditions and Economic Outlook
23:15 Future Trends in Private Equity