Cibati: “1% of our assets is in this asset class”
German fund Bayerische Versorgungskammer has invested 500M euros in PE, the French Erafp has invested 200M, not to speak of the astonishing numbers of UK and USA funds: over 2B in private equity for the Railways Pension Scheme, and more than 19B for the US teachers’ CalPERS fund. In Italy, the most significant experience in this sense is represented by Cassa Forense (CNPAF). Enrico Cibati, Head of the CNPAF Investment Department, tells us that “Cassa Forense is the first AMUF (Asset Management Umbrella Fund) subscriber, with a total investment of 175M euros.”
AMUF is EIF’s fund of funds. Can you tell us what it is exactly and how it works?
AMUF is the result of over a year long cooperation between Cassa Forense and the European Investment Fund (EIF). AMUF will make an important contribution to the development of the European economy. Last June, after signing a mutual information exchange agreement with Cassa Forense, EIF has launched AMUF with the aim of raising more than two billion euros in these three sectors:
How was the investment of Cassa Forense divided?
Our investment was segmented into the three sectors: 100M to Private Equity, 50M to VC and 25M to Life Sciences. Overall, we have decided to invest 75M euros in the two VC segments because we believe that this kind of action can be a strong push to both technological and scientific innovation, which can help Europe become a real competitor of the United States.
Among Italian social security funds, that of lawyers is the most active in this area. A few years ago Cassa Forense took part in a fund that selects the best Italian VC opportunities. What is the rationale of these actions? What advantages do they entail for you and for the economy?
At Cassa Forense we believe that contributing to Italian and European economic growth can create greater job opportunities for our members too. Investments into real economy have an immediate multiplying effect on the growth of job opportunities and in general on the entire involved industry. Moreover, we are certain that engaging in Venture Capital, with carefulness and the counselling of experienced institutional managers such as EIF or the Italian Investment Fund, means that we can contribute to technological innovation. We believe that Italy needs this kind of innovation most of all. Our country may give rise to the best ideas, but we must help these grow giving them the capital they need to succeed. It must be said, however, that even taking into account the recent AMUF operation, Cassa Forense has invested less than 1% of its total assets in Venture Capital, and the reason for this is that VC has an important volatility component.
The latest news that concerns Cassa Forense is its investment in Fico, a food start-up just outside Bologna. Various professional funds have so far invested 50M euros as part of a 143M fundraising, an incidence of about 30%, in which you have a stake of 10M. How much has Cassa Forense currently invested in start-ups and what do you expect for the future?
Actually, we do not directly invest in start-ups. The Fico operation concerns a real estate fund that has financed the restoration project of the Bologna fruit & veg market. As part of this project, which has allowed to re-use a beautiful building – one that I suggest you should visit, by the way – we thought it would be effectual to entrust its management to the Italian agri-food promotion champion, Farinetti and his Eataly. This is how a pioneering idea was born, the one that was called Fico, the largest agri-food park that comprises all Italian quality. We believe that it will attract more and more visitors: it deserves the trip.
According to important international studies, investments by social security funds are the main driver of growth for European VC, which is far behind US VC, despite having both continents a similar market from the point of view of GDP and population. What is your opinion?
Cassa Forense, along with other European institutions such as EIF, wants to help fill the gap that exists today between Europe and the United States in terms of Venture Capital investments. Social security funds and pension funds can make a contribution, even the smallest one: the sum of each investment should give important impetus to the growth of European VC. On the other hand, European investments in this sector are not as high as they are in the US, and this means that we need more time to collect capital. We hope that the combination of these two factors, i.e. an increase in financial resources and a greater number of institutional investors, will start an exponential increase in the number of quality projects in which to invest.