In mature capital markets high segmentation and specialization are normal. Every phase in the life cycle of companies corresponds to specific investors. So, even for companies in decline, it should be somehow easy to find investors willing to buy out their shares, in order to verify the possibility of a turnaround or relevant portions of corporate debts to carry out arbitrages of value. As it is not an easy job, great economic returns are expected and this probably explains the great attention paid by professionals and the press and why these funds have never been popular. In the U.S. since the ‘80s they have been called “vulture” like large birds eating flesh of dead animals. While economic literature about venture capital is very articulated, this is not the case with vulture funds, as only few academic papers have been dedicated to the topic. The purpose of this paper is to provide an updated overview of turnaround financing in Italy, meaning operations regarding distressed or troubled companies, carried out by professional private equity investors. This analysis springs from and is compared to similar studies carried out a few years ago trying to investigate whether there has been an improvement. From a methodological point of view, the ongoing research consists in a qualitative analysis, based on one to one interviews, with the main market players. The results, even if not always statistically significant because of the size of the sample, represent an important part of the universe of Italian vulture funds and offer interesting qualitative points of view regarding the operational aspects. Despite a more developed private equity market, the development of a big NPLs market involving international funds and the reform of the bankruptcy law the Italian market still shows only few dedicated operators and a general lack of interest for this private equity niche.

(2019). Corporate restructuring through vulture investing in Italy [conference presentation (unpublished) - intervento a convegno (paper non pubblicato)]. Retrieved from http://hdl.handle.net/10446/152614

Corporate restructuring through vulture investing in Italy

Danovi, Alessandro;Tanghetti, Jessica
2019-05-16

Abstract

In mature capital markets high segmentation and specialization are normal. Every phase in the life cycle of companies corresponds to specific investors. So, even for companies in decline, it should be somehow easy to find investors willing to buy out their shares, in order to verify the possibility of a turnaround or relevant portions of corporate debts to carry out arbitrages of value. As it is not an easy job, great economic returns are expected and this probably explains the great attention paid by professionals and the press and why these funds have never been popular. In the U.S. since the ‘80s they have been called “vulture” like large birds eating flesh of dead animals. While economic literature about venture capital is very articulated, this is not the case with vulture funds, as only few academic papers have been dedicated to the topic. The purpose of this paper is to provide an updated overview of turnaround financing in Italy, meaning operations regarding distressed or troubled companies, carried out by professional private equity investors. This analysis springs from and is compared to similar studies carried out a few years ago trying to investigate whether there has been an improvement. From a methodological point of view, the ongoing research consists in a qualitative analysis, based on one to one interviews, with the main market players. The results, even if not always statistically significant because of the size of the sample, represent an important part of the universe of Italian vulture funds and offer interesting qualitative points of view regarding the operational aspects. Despite a more developed private equity market, the development of a big NPLs market involving international funds and the reform of the bankruptcy law the Italian market still shows only few dedicated operators and a general lack of interest for this private equity niche.
intervento a convegno (paper non pubblicato)
Paper presentato a "11th International Scientific Conference: New Challenges of Economic and Business Development – 2019: Incentives for Sustainable Economic Growth", May 16th – 18th, 2019, Riga, Latvia.
16-mag-2019
Danovi, Alessandro; Tanghetti, Jessica
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