After the COVID threat, Italian family businesses are in a succession race

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After the COVID threat, Italian family businesses are in a succession race

Dionisio Archiutti watched his father toy with the idea of ​​bringing new investors into the family business, but he knew time wasn’t always going to help the 80-year-old with his decisions. “Italian entrepreneurs often hold their companies tight as they get older, fearing they have no future if they are not at the top,” he said. A year after the pandemic began, Giacomo Carlo Arciutti sold his 30% stake in the kitchen manufacturer he founded in 1967 in an industrial area of ​​northeastern Italy to his private equity firm.

“The pandemic has shown that businesses can be hit by a tsunami and made us realize that we have to deal with a generational shift,” said NB Aurora CEO Francesco Sogaro. For Archiuttis, NB Aurora currently holds two of his five board seats at Veneta Cucine and works with the family to guide its growth strategy in a “subtle but effective” way. “Certainly, you can’t expect to tell my father’s generation of businessmen what to do. But the fund’s expertise has allowed us to take a bolder step forward.” He says Archiutti.

Before the pandemic, Archiuttis was a rare Italian family his business that welcomed outside investors as a first step in managing succession planning. But today, bankers are overwhelmed with demands to explore possible deals from small and medium-sized enterprises (SMEs), which face challenges ranging from supply chain disruptions to funding the investments needed to go digital to date with ecological business standards.

The family business is the backbone of Italy’s economy, with nearly a third of it in the hands of his 70-something owner, according to data from his AUB Research Center at Bocconi University. And inheritance is still a deep-rooted problem. “We are small and old,” said Francesco Casori, president of AIDAF, a family business association that accounts for nearly 70% of Italy’s 148,530 SMEs, according to data firm Cerved. The loyal owners have been accused by the Bank of Italy of blocking investment needed to boost productivity and scare skilled managers to stunt growth.

COVID Catalyst “Fear is always the biggest motivator,” said AUB Director Guido Corbetta. “The shutdown of production in the first wave of COVID has left companies in a panic. You have the added incentive of getting a higher rating at.

The COVID-19 crisis, which has claimed more than 147,000 lives in Italy, coupled with the worst economic downturn since World War II, is her second-highest death toll in Europe after Britain, and some seemed to persuade him to let go. NB Aurora’s Sogaro added: The Illy and Vergnano families, for example, welcomed a handful of investors into their respective coffee businesses last year as they pursue international expansion plans.

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