No. 98 - The Italian private equity funds: an analysis of the portfolio companies’ economic and financial conditions

This paper analyses the financial and economic conditions of the companies in the portfolios of Italian private equity funds. Information from an ad hoc survey of Italian asset management companies, combined with accounting data for 2008 drawn from the Central Credit Register, is used to develop a number of indices for 341 Italian investee companies. A multivariate statistical analysis on accounting and credit quality data (from the Central Credit Register) finds 41 companies with high credit risk and low profitability; taking additional financial indices and ratios into account, the number of "critical" companies rises to 137 (40 percent of the total). Most of these investments in critical companies by the private equity funds are quite recent; the returns appear to be affected adversely by the economic situation.