5 Questions to: Azzurra Capital
A couple of questions about...
Azzurra Capital is an international private equity firm that focuses on growth opportunities in leading privately-owned companies primarily in Italy and select European countries. With four decades of experience in finance, advisory, and industry, Azzurra Capital provides not only capital but also trusted financial advice and strategic/operational value. Azzurra Capital's unique approach to true partnerships with entrepreneurs and privately-owned businesses has resulted in a proven track record of generating long-term value and superior risk-adjusted returns for their investors.
What makes your management unique?
We are a group of particularly senior professionals who are still very “close to the ground” on our everyday jobs. We have learned to be humble, and we try to, rather than lecturing people on what they should do, help them to do better what are they are best at. That is what we do with our participating companies, with their management teams and with our partners. On our side we, of course, contribute capital, experience and a wide network of contacts and opportunities that we put at the disposal of our companies and partners. It is through this “stimulus” and “cross-fertilisation” that we maximise the performance and returns of our portfolios.
Why did you choose Luxembourg as domicile for Azzurra’s recent PE fund?
Luxembourg has become a reference point for the European PE industry and beyond. The combination of a well-devised and flexible legislation, the abundance of first-class service providers and the security provided by a rigorous regulator make Luxembourg the natural “port of call” for any serious and professional management team looking to establish or grow a PE business in Europe. We feel extremely comfortable with our existing Luxembourg setup and, in spite of the “much discussed” high regulatory standards imposed on all of us, we believe that establishing our business in Luxembourg was the “thing to do” given our own ambitions and the expectations of our international investor base.
Can you describe your investment philosophy and approach to selecting portfolio companies?
We are growth-driven opportunistic investors. We look for companies that are in need of capital and advice to move on to the next level, with strong management teams in place. Our aim is to support and enhance those capabilities of a management team or, many times, a particular entrepreneur, and help them achieve their goals. This means that we are equally prepared to take majority as well as minority stakes, but we always keep strong management/financial rights to ensure that we can manage our risks and deliver to our investors. This tailor-made approach also means that most of the times we invest in proprietary situations that are not open to everyone. We are not good at auctions as we need to find that angle where we can really put our investment philosophy at work.
How do you source new investment opportunities and maintain relationships with potential portfolio companies?
Most investment opportunities come from our networks of contacts and, funnily enough, from referrals made by managers and entrepreneurs with whom we have invested or work in the past. We maintain a broad pan-European as well as transcontinental network of contacts and business relations which feeds our pipeline and helps us provide our companies with further opportunities for growth. Sometimes opportunities take time to shape up and reach a degree of maturity for an actual transaction to take place. There are companies that we have had contact and interacted with for years before they are ripe for a transaction to take place. I guess this is the beauty of all of us having been around in the financial markets for a long time.
What are your thoughts on the current state of the private equity industry and its future outlook?
The PE industry has had a phenomenal development over the last 30 years and PE exposure has now become a must-have in any investment portfolio. The sector has progressively become more structured and professional, but it must not lose the “creativity” and “innovative” element that lies at the root of its success. We have seen, sometimes, “run of the mill” deals which have failed because not enough care and attention was given to the fundamentals of the business, blinded by a hypothetical financial gain. With leverage now in shorter supply and with an increased volatility in financial markets in general, more attention will need to be paid to the true fundamentals of making a business successful and obtaining a return from that success. Operational improvement, strategic development and both organic and inorganic growth will be more important levers in our view than excessive leverage or potential reratings.
Jorge Delclaux
Co-Founding Partner & COO Azzurra Capital
Jorge has a vast experience in the corporate world with various roles in different financial companies. He has been a Board Member and Senior Adviser to the Board to various organizations in the banking & finance sector being involved in numerous relevant transactions.
With a track record of over 25 years of experience in private equity and investment, he co-founded Azzurra Capital where he is now Partner & COO.