The last 20 years of evolution of modern society have been marked by epochal events that have strongly influenced economic choices and financial strategies.
The internet, the digitization of production processes, artificial intelligence, the start-up and fintech phenomenon, globalization and continuous metamorphosis of international geopolitical assets have radically changed our way of “doing business”. Investors and entrepreneurs have had to adapt quickly to sudden events, not least the pandemic, that can completely change the status quo.

However, the one constant remaining for entrepreneurs in this continuous change of events is the need to raise funds and, for finance, to find new advantageous formulas for the use of capital.

One alternative area offering new investment opportunities than those more traditional and where lifeblood may be drawn is certainly the private markets, particularly interesting now for channeling resources towards SMEs.

Private markets, starting in the United States and subsequently landing in Europe, are arousing strong interest both on the Old Continent and in Italy, where they are spreading in a very lively manner. These are investment solutions designed for finance companies not listed on regulated markets and, therefore, more difficult to know and less accessible for investors. A method that is very well suited to small and medium-sized companies with significant growth potential and for private investors looking for long-term profitable investments for their capital.
Private equity, private debt and venture capital are generally the best known instruments. In the case of private equity, the investor, usually a fund that has first raised capital from private and institutional investors, provides capital to selected companies with significant growth prospects, bringing resources and know-how to improve their development plans and results.
In venture capital, investors take equity stakes in the company to support its start-up or even expansion phase.

Private debt, on the other hand, includes investments of a bond nature issued by unlisted companies to finance strategic and development activities. The flourishing of further private asset formulas, such as invoice trading, minibonds, direct lending and other similar products, clearly demonstrates how the Italian economy is receptive to following alternative paths favoring the delicate balance between capital and business.

What are the benefits? First of all, these are investments unaffected by market fluctuations that have a medium/long term duration. Another interesting prerogative is investment stability; in fact, investors cannot arbitrarily “disinvest” their capital, as it remains bound to the established deadline. This is a condition allowing the company to carry out its development plans and create value.

The investments required are always substantial and are riskier than other traditional instruments. This is why they are reserved for professional investors, able to better evaluate this type of commitment and also support the company by bringing experience, expertise and opportunities through their network.
Without a shadow of a doubt, therefore, private markets in Italy are also a very interesting growth lever that is gaining momentum, as can be seen from the data from the private equity and venture capital collection which in 2020 recorded a growth of 32% over 2019.

Entrepreneurs and investors thus have a great variety of instruments and options at their disposal as an alternative to banking, which provides more dynamism and opportunities to the market.
The need, now, for entrepreneurs and investment bankers, is precisely this, to foster a synergistic relationship between entrepreneurship and finance, between business and capital which, through new development models and new financial instruments, can support the changes taking place with a discerning perspective, anticipating the future and enhancing the Italian economy.

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