Ver Capital sgr will be the last firm in a short row who chooses to be on Italian corporate distressed assets, MF Milano Finanza writes today adding thatVer Capital’s founder Andrea Pescatori, is close to sign an agreemnt with a leading US asset manager who is financing the project. sThe size of the new fund is still not known however it should be something around one billion euros as the new veichle will be able to invest till a maximum of 100 million euros per deal.
Ver Capital’s nes fund will sign agreements with lending banks of its target companies on a deal-by-deal basis and will choose each time the best structure for the deal even if the major idea is to invest new finance ranking as “super senior” to pre-existing senior bank lending  while banks might be asked to renegotiate terms of their lending facility and not suffering straight write-offs in line with a DIP financing approach (Debtor-in-possession).
Ver Capital just announced a first 50 million euro closing for its first italian private debt fund targeting 150 million euros (see here a previous post by BeBeez). adding the distressed assets fund, the asset management company is now completing its offer all focused on eruopea corporate credit (loans and bonds).
Ver Capital has a few competitors in Italy. Other active market operators are actually just four.  Pillarstone Italy, backed by Kkr; and Idea Credit Recovery, managed by Idea Capital Funds sgr and backed by Bayside Capital (Hig Capital group) both buy non performing loans (not bad loans) from Italian banks and invest new finance in the target distressed company. However the two funds have been structured in a very different way.
As for Pillarstone Italy, it buys and securitizes from lending bank each single loan versus a specific company, banks buy back the senior tranches of the resulting abs while Pillarstone invests new super senior finance in the company. this structure does not provide banks with a loan de-recognition as the banks come back home with a loan which is still related to a specific company. However that loan is less risky than before the deal as the company has been re-capitalized by the fund.  So the bank is able to limit the capital ratio impact of the loan while Pillarstone is free to apply the structure to every bank which is keen to agree to the project. Pillarstone had started activity  after having signed an agreement with Unicredit and Intesa Sanpaolo as for their loans versus 5 specific companies for a gross value of about one billion euros (Burgo, Lediberg, Manucor, Alfa Park, e Cuki, see here the news of the securitization of those loans by Pillastone Italy Spv srl published on Italy’s Official Journal). After that Pillarstone agreed with the two banks to add  Sirti‘s loans to the project, and finally Premuda‘s loans too, enlarging the agreement to Banca Carige.
Idea Credit Recovery on the other signed an agreement with seven banks  (Unicredit, Bnl, BnpParibas, Banca Popolare di Vicenza, Montepaschi, Banca Popolare di Milano and  Biverbanca) selling their loans versus 8 companies (Tarketti Sankey, Dynamic Technologies, Cartiere Pigna, Util Industries, Sinterama, Scandolara, Prime holding and Clerprem) to a specific of Idea Cr fund (having a 180 million euros total gross value). The fund securitizes those loans and banks obtain a stake in that fund sector in exchange of their original loans. This structures provides the banks with a total de-recognition of their original loans as they now own a stake in a pool of loans and no more in each single loan. Idea Cr equity sector fund (80 million euros) will then invest new finance in the target company in order to support the new business plan (see here a previous post by BeBeez).
Other two operators work in Italy on a deal-by-deal basis with a structured fund. On one side you see Oxy Capital, a management company founded by former McKinsey’s partner Stefano Visalli together with Portoguese Oxy, which is supported by UK turnaround specialist Attestor Capital, who acts as co-investor: BeBeez was told that Attestor has allocated 200 million euros for Italian investments in 2 years and has a committement to invest more after this first tranche in order to reach a 500 million euros total exposure to Italy (see here a previous post by BeBeez). On the other side you see Europa Investimenti, focused on small deals and  targeting companies in bankruptcy procedures. New York turnaround specialist Avenue Capital own a minority stake in europa Investimenti and has allocated 150 million euros for its investments in Italy (see here a previous post by BeBeez).
As for other firms working in the sector,  Orlando Italy has been active for a while but its last fund is now completely invested and there is no news about a first closing of the new fund that was launched in Spring 2015 targeting 150-200 mllion euros (see here a previous post by BeBeez).
Finally Ikf holding, an investment veichle listed on the Milan Stock Exchange targeting companies in bankruptcy procedures, entered itself a bankruptcy procedure last July (see here a previous post by BeBeez).
US private equity giant Oaktree also used to be active in the turnaround market in Italy )the fund still owns Conbipel), but the fund changed its market target in the last few years in Italy, focusing on the financial sector (it bought Banca Lecchese from Banca Etruria last year), a ground where Oaktree often competes with Apollo Global Management.
