Progressio SGR, the Italian private equity firm, is raising a new fund, Progressio Investimenti III, in response to LP demand and a doubling of proprietary deal flow over the past five years.
Progressio will raise EUR225 million for a final close at the end of 2017, after a summer first close. As with previous funds, the money will predominantly be spent on proprietary deals and primary buyouts.
The management team, which has averaged a 6.5x entry EBITDA multiple across its portfolio of prestige domestic brands like luxury fashion retailer Moncler, high-end furniture company Giorgetti, and Sanlorenzo Yacht, is targeting exit returns of more than 2.5x from each portfolio company, over three-to-five year horizons.
Progressio investee businesses are developed into dominant players in their respective markets through organisational restructuring (Italchimici generic pharmaceuticals), branding and expansion into new markets (Moncler jackets and coats), and a bolt-on strategy (Chromavis cosmetics and Duplomatic hydraulics). They each have revenues of between EUR30 million and EUR150 million.
The company’s 16 home-grown realisations have produced 3.5x MOIC and an 80 per cent gross IRR.
Cebile Capital is acting as adviser and placement agent.
Filippo Gaggini, Progressio managing partner, says: “We already have a strong pipeline of new deals and look forward to growing our network of talented Italian entrepreneurs and managers.”
Sunaina Sinha, managing partner of Cebile Capital, says: “When you see what this group has achieved over the past decade, in difficult economic circumstances, it’s not a surprise that LPs around Europe view Progressio as a haven amid the continent’s political turbulence. They operate above the market but sensibly. We expect over-subscription.”
