Mezzanine capital in private equity operations

Country: 
Italy

This study aims to highlight some financial instruments, points of reference for a new economic system, in order to support enterprises. The role of investment in risk capital, in a modern financial system is relevant under many profiles. First, for enterprises, the possibility of referring to specialized operators in financial support aimed at the creation of value, this process enable companies to obtain “patient” capital, which can be used to support the start-up phase, rather than developing new plans, strategies, corporate acquisitions, involvements or other critical processes of their life cycle.

In particular, this capital may be used by the company to develop new products and new technologies, to expand the capital, to finance acquisitions, or to strengthen the financial structure of a company.

Private equity can also be used to solve problems associated with the ownership of a company or generational phenomenon. Also, it is the preferred instrument for the realization of operations to buy out/buy in, performed by experienced managers.

More over, as the institutional investor support does not end up in the mere provision of risk capital, an additional benefit is derived from the availability of managerial know-how that the investor provide to the company in order to achieve its development objectives. In this way, it is possible to support, also, external growth through investments, contacts, collaborations and more, with entrepreneurs of the same or other areas.