NB AURORA is the first permanent capital vehicle listed on the MIV
NB AURORA is the first permanent capital vehicle listed on the MIV to support the real economy of our country.
"NB Aurora is sponsored by Neuberger Berman and its investment objective aims at achieving capital appreciation in the medium long-term, mainly through minority investments in unlisted Italian SMEs"
Contribution by Francesco Sogaro, Managing Director NB Aurora
From the 4th of May 2018, NB Aurora S.A. SICAF-RAIF ("NB Aurora") is the first permanent capital vehicle listed in Italy, on the professional segment of the MIV. NB Aurora was created with the aim of investing in unlisted SMEs, channelling financial resources to support their growth and internationalization and thus supporting the real economy of the country. NB Aurora’s team operates through an active minority approach, in partnership with entrepreneurs with a medium-long term time horizon. Thanks to the listing on the MIV, NB Aurora collected 150 million euros, used to acquire 44.55% of Fondo Italiano di Investimento (“FII”) shares and to invest in other direct minority shareholdings. Currently, NB Aurora holds 9 investments in SMEs, of which 4 through direct ownership and 5 through the shareholding in FII.
NB Aurora is promoted by Neuberger Berman (“NB”), a private, independent investment company controlled by its employees, with approximately 330 billion dollars under management (as of March 31, 2020). NB is one of the leading global players in the private equity industry, having over $60 billion in primary, secondary and co-investment funds, and investing (directly and indirectly) in over 16,000 companies worldwide. In Italy, Neuberger Berman has the largest private equity team with 30 experts and more than 1,5 billion euros under management.
NB Aurora's investment target are Italian SMEs of excellence, leaders in market niches with high growth potential, with turnover between 30 and 300 million euros and a strong propensity to export. NB Aurora's goal is to support companies in a shared project of organic industrial growth - developing a market share abroad, penetrating new markets, strengthening management or increasing production capacity - and external growth through acquisitions. NB Aurora supports this growth with a hands-on approach, leveraging both its international network and its own “permanent” listed fund structure (with no formal deadline). Indeed, NB Aurora is a stable partner with a long-term investment horizon, free from the traditional rigid short-term exit constraints that characterize private equity funds. This feature allows the fund to be independent from short-term contingencies, guaranteeing a careful evaluation of both investment opportunities and divestment decisions. In the end, NB Aurora introduces in its subsidiaries the best corporate governance practices, with the aim of encouraging a possible entrance to the stock market (potential IPO).
Investing in private equity is usually difficult as large amount tickets are required; moreover, very often the target companies of traditional funds are those in which the entrepreneur wants to sell the whole business, bringing the fund to be highly leveraged in order to complete the purchase, thus exposing the investor to greater financial risk. Instead, NB Aurora has a more balanced risk-return profile than traditional private equity funds, investing in minority stakes to support the entrepreneur's strategic vision. In addition, the Italian SMEs in which it invests are fairly de-correlated from country risk, since: (i) at least 60-70% of turnover comes from foreign markets, (ii) limited use is made of additional financial leverage, allowing the company to have a lower risk profile and (iii) since NB Aurora is a vehicle listed on the Italian Stock Exchange, there is absolute transparency on management and on the liquidity of the investment. NB Aurora has a favourable structure also for investors as it gives a dividend yield of approximately 10% every year.
NB Aurora's dedicated team is made up of professionals with decades of experience in private equity and investment banking and is supported by a team of operational managers with different sectoral skills who, as well as assisting the team in the screening and due diligence phase, they also help entrepreneurs of portfolio companies in the business development process. For example, considering the 4 direct investments currently in portfolio (Club del Sole, Dierre Group, Rino Mastrotto Group and PHSE), 2 have already finalized M&A transactions (Club del Sole and Rino Mastrotto Group), 3 have been strengthened in their management (Club del Sole, Dierre Group and PHSE) and all of them have adopted a sustainability report for ESG purposes.
Finally, NB Aurora can boast an exceptional track record, with more than 35 investments and 30 exits to date. The outgoing capital was essentially generated by an operational improvement due to turnover growth and the increase in profitability, fulfilling more than 50 acquisitions around the world. Thanks to its investment activity, NB Aurora’s team has so far contributed substantially to the Italian economy, encouraging the creation and development of leading companies globally.