• Italy is attracting more international investors in private markets due to regulatory stability and entrepreneurial ingenuity.
  • Private credit is gaining traction, with funds partnering with banks to deploy capital.
  • Private equity is also expanding, with recent large deals like KKR's acquisition of a stake in Telecom Italia's Netco.

Italy's Growing Allure for Global Investors

Italy, traditionally a laggard in luring foreign capital, is increasingly drawing international investors to its private markets. According to Blackstone's country Chairman Andrea Valeri, the nation's stable regulatory climate and the ingenuity of its entrepreneurs have improved its perception among institutional investors.

"What institutional investors like us are really focused on is regulatory stability," Valeri said at Bloomberg's Future of Finance conference in Milan on Thursday. "Italy in this regard has been on a very steady growth trajectory."

Valeri, who also serves as chief investment officer for Blackstone Credit and Insurance's private credit business in Europe and APAC, emphasized that while banks remain dominant, Italian companies are now opening up to non-bank lenders. Private credit funds are often partnering with domestic banks to deploy capital, marking a shift in the financial landscape.

Private Credit: A Maturing Market

Italy was slightly behind in private credit, according to Cecile Mayer-Levi, head of private debt activity at Tikehau Capital SCA. However, partnerships with banks are well established.

"We have a constant balance with the banks, which really we consider our partners and not only our binary competitors," she said. "It's much more of a convergence between the two solutions."

The country has historically presented hurdles to private credit lenders, as domestic regulation requires funds to finance deals as bonds rather than loans—a cumbersome procedure. But Italy is catching up with other European private credit markets, with funds putting more efforts into sourcing domestic deals, partially because competition for deals has toughened elsewhere in Europe.

Private Equity on the Rise

Private equity is also an area of growth. KKR & Co. recently closed a €22 billion deal ($24.6 billion) for the acquisition of a majority stake in Telecom Italia SpA's Netco, signaling confidence in Italian assets.

"It's a great country to invest here because there are a lot of very good companies and the market here is not as competitive as other markets," said Giampiero Mazza, head of Italy at CVC Capital Partners, a private equity firm. "You can create your own ideas."

As Italy continues to align with broader European trends, its private markets are poised for further expansion, offering investors a compelling mix of opportunity and stability.