Italian Strategic Fund

The Italian Strategic Fund, also known as the Fondo Strategico Italiano (FSI), was established in late July 2011 as a sovereign wealth fund.

It has an estimated operating balance of €4 billion. Its purpose is to invest in strategic Italian companies to help them to compete globally. The fund’s activity is restricted to healthy and profitable Italian businesses, with solid growth prospects, in need of capital injection to enlarge their business and be competitive on a global scale.^[1] The initial capital of the fund totalled €1 billion, with 90% of this sum contributed by CDP and 10% from Fintecna. The CDP is ready to inject a total amount of €4 billion.^[2] The fund was set up by the state-controlled lender Cassa Depositi e Prestiti (CDP) on the directive of Economy Minister Giulio Tremonti, emulating a similar fund in France, allegedly after French dairy company Groupe Lactalis SA made a successful takeover bid for Parmalat.^[3]

In September 2011, Maurizio Tamagnini, formerly a top investment banker at Merrill Lynch, was hired as the CEO of the fund.^[3] The position of chairman is filled by Giovanni Gorno Tempini, who is also the CEO of CDP.^[4]

Investments

In May 2012, the Italian Strategic Fund stated that it would give financial backing to help fund a project that will bring fiber-optic cable to Italy’s main cities, as part of the country’s attempt to increase high-speed internet connectivity. The €4.5 billion project, led by fibre-optic company Metroweb and its main investor F2i Fondi Italiani per le Infrastrutture will receive an initial €200 million through Reti TLC, the vehicle that control Metroweb. There is also an option for the fund to provide a further €300 million.^[5]

In May 2012, the FSI acquired an 18.6% stake in biopharmaceutical company Kedrion S.p.A from holding company Sestant S.p.A for a total of €150 million. In addition, the FSI has an option to acquire a majority stake in Kedrion from Sestant.^[6]

Also in May 2012, the defence and aerospace group Finmeccanica agreed to sell its 14% stake in aero-engine parts maker Avio to the FSI. According to Finmeccanica, the deal is subject to Avio being listed on the Milan stock exchange before the end of 2012.^[7] In November 2012, Prime Minister Mario Monti, signed with the Government of Qatar a €2 billion development project; the main investor is Qatar Holding.

It was announced in March 2014 that the FSI had made a non-binding offer for a 30% stake in the Spanish olive oil producer Deoleo.^[8]

References