Direct public intervention in private equity industry: Impact and performance in the Italian case

Martino Rocca

Student thesis: Master thesis


The present dissertation focuses on the role of direct public intervention in the Italian private equity industry. Firstly, this work aims to explain why the public sector has looked with increasing interest at the private equity activity, providing at the same time a descriptive picture of the direct public intervention extent in the Italian private equity industry. Secondly, this study tries to identify what affects the performance (IRR) of public participated investors in order to explain why, during the period 1998- 2009, it has been significantly lower than that of independent players. Through a double-level analysis on the whole PEM database 2009 and on a sample of Public participated investors, the findings suggest that the lower “Professionalization” of public participated investors’ management teams has played a key role in driving their poor financial returns. The investment team “Professionalization” has been found to be positively related to performance, while the “Experience” within the private equity industry has provided controversial results. Moreover, the financial returns of Public participated investors’ turned out to be significantly influenced by the ratio between public and private funds provided to run the investment activity, but not by the private equity investor’ shareholder structure. The final part of this work poses questions on whether the IRR approach is still appropriate to assess the performance of public participated investors, and, in this regard, an alternative method is proposed in order to extend the evaluation of private equity investment deals beyond a mere financial perspective.

EducationsMSc in Management of Innovation and Business Development, (Graduate Programme) Final Thesis
Publication date2014
Number of pages68