Alessandro Profumo 2.0, from leader of Italian bankers first at Unicredit and then at Monte dei Paschi to manager and entrepreneur. These days Profumo is a serene man who is cultivating the desire of a lifetime: to work on his own with no more shareholder-owners and to put his professional expertise at the service of the growth of medium-sized companies. He invested his own money and became the principal shareholder and senior partner of Equita Sim, one of the finest companies in the Milanese financial community of which he is chairman. The new project will be in the starting blocks at the beginning of 2016. "At 58 I feel full of energy and I have a dream: to be able to grow 10-15 of the interesting companies of the Fourth Capitalism in just a few years, of which Italy is full". But – as he explains in this interview with FIRSTonline – it's not just a coincidence that Profumo's new project is now taking place. “Milan – says the former top banker – is reborn and the Renzi government is reawakening Italy”. But for Profumo no future political temptation.
FIRSTonline – Profumo, during the last months of your presidency at Monte dei Paschi, you announced that you wanted to change your profession and cultivate your new professional project at the service of medium-sized enterprises: how did you get this idea?
PERFUME - It was an idea that I had already matured in Unicredit. After so many years at the head of large banking groups with very complex corporate structures, I had the desire to work in a smaller company that would also involve me as a shareholder and would allow me to have more time to dedicate myself to clients. The time to develop this project of mine is the most suitable: not only because we have finally come out of the recession but because the Italian financial industry is experiencing a phase of strong discontinuity in which, although still bank-centric, the weight and role of the banks are inevitably destined to change and shrink.
FIRSTonline – And what does this entail and what spaces does it open up?
PERFUME - It leaves important spaces for new entities positioned between medium-sized enterprises and the financial markets. However, I would like to be clear on this point: it is no longer time for start-ups, there are already excellent players in the field, such as Equita Sim, for example, who can successfully perform this essential function of linking markets and medium-sized enterprises and contribute, with great professionalism and with direct knowledge, to their growth.
FIRSTonline – At what point is your project taking off and when will it really start?
PERFUME - We're at a good point. I made an agreement with the shareholders of Equita to acquire the stake in a private equity fund with the management. With the management, which has a strong shareholding presence and first-rate professional qualities, I have also reached an agreement to jointly manage the new Equita course and focus it increasingly on the development of medium-sized enterprises. Considering the time necessary for the Bank of Italy's authorizations, which we expect within the year, we will be ready for the passage of the majority and for take-off at the beginning of 2016.
FIRSTonline – But you are already president of Equita Sim.
PERFUME - Yes, and it won't be a purely representative presidency because I am passionate about this job and I feel fully involved - as a senior partner - with the management, which I found excellent, in the development project, also thanks to a type of governance that we have given ourselves and which maximizes team play.
FIRSTonline – Exactly what does Equita Sim do and what will it do?
PERFUME - Customers are mainly of two types: medium-sized Italian companies (although this does not exclude relationships with large groups) and institutional investors. Today Equita is especially strong in advisory and brokerage with institutional investors and in investment banking and has a presence in asset management. Its mission is to invest heavily in the growth of medium-sized enterprises, also by virtue of research and study of companies which represents the true added value of Equita, which already today covers 120 listed medium-sized enterprises. In the future we will evaluate whether to set up a dedicated fund for our direct investments in the equity of medium-sized companies.
FIRSTonline – The research of Mediobanca's research office has documented the strengths and weaknesses of the medium-sized companies of the Fourth Capitalism far and wide but has highlighted, in addition to their proven dynamism, their widespread reluctance to land on the stock exchange and really open up to the market : Equita will also work on this front.
PERFUME - Yes of course. In the first place, we will try to strengthen the medium-sized companies that are already listed on the Stock Exchange and that have the ambition to grow and internationalize more and more, but we will certainly accompany towards the equity and/or debt market those who have so far remained distant and no longer thinks that the bank is the only source of finance that a company needs. Among listed and unlisted medium-sized companies there is then ample space for merger and acquisition which falls within our comfort zone and there is the possibility of approaching institutional investors who are looking for attractive companies. But in order to fully develop this activity it is essential to get to know medium-sized companies directly and to count on a totally independent research activity of high professionalism and reputation like that of Equita.
FIRSTonline – Who are the main competitors of the new Equita?
PERFUME - The field is crowded: in intermediation for institutional clients there are 3-4 names offering research, while on the advisory side, in addition to some foreign operators and Italian boutiques, there are large commercial banks, but competition does not exclude cooperation on development.
FIRSTonline – Will Equita also be listed on the Stock Exchange?
PERFUME - It is possible, in the next three years we will consider the hypothesis. First we have to exploit all the potential that Equita and its management have.
FIRSTonline – Profumo, but after an extraordinary career like yours at the top of large banks, what is your personal goal now?
PERFUME - I am 58 years old but I feel full of energy and I do a job that I really like with excellent people in whom I have invested. My dream is simple and I will be happy if I can grow 10 or 15 of the many wonderful middle schoolers this country is full of.
FIRSTonline – Is it by chance that your project was born at a time when Milan is experiencing a new spring and signs of recovery are finally emerging in Italy?
PERFUME - It's not random at all. The importance of the context is decisive. Milan is experiencing a truly magical moment and Italy is awakening.
FIRSTonline – What does the rediscovery of Milan mainly depend on?
PERFUME - It is the result of the combination of several success factors. There was of course the great success of the Expo and the public debate on the Milan Charter. Another element that should not be underestimated is the change of rectors of the Milanese universities, which are now directed by young, dynamic rectors who are willing to dialogue and collaborate with each other. Not to be forgotten are also some private initiatives of excellence such as the Sylos Armani or the Prada Foundation. Finally, the good work of the municipal administration of Milan, initiated by Moratti and developed by Pisapia, counted and counts. The urban changes that the city has undergone have had a positive influence, including the reorganization of Porta Nuova and the decision to move the Unicredit headquarters to the skyscraper in Piazza Gae Aulenti, which I personally initiated when I was at the helm of that bank .
FIRSTonline – Now, however, a decisive turning point is looming, such as the choice of the new mayor. In the past you have had some political temptations: could it be topical again?
PERFUME - I rule it out completely. Those policies are temptations of the past wholly archived. Today I am focused solely on my new job and on the Equita project.
FIRSTonline – Milan is reborn but also in Italy there is a new wind and the recovery is finally starting to show itself: thanks to the international situation, to Mario Draghi or Matteo Renzi?
PERFUME – Yes, finally the Italian recovery is tangible and affects the renewed attention of international investors towards Italy. There is a new climate of confidence in our country on the markets. Mario Draghi has certainly done a lot and has improved the European economy, but we must also honestly acknowledge the great merits of Prime Minister Matteo Renzi. Italy has been waiting for reforms for years and its government is making many. But, in addition to the reforms already implemented and those in the pipeline, Renzi's dynamism is striking and positively perceived, which is all the more beneficial the more the country has been imprisoned by immobilism for years. All of this is appreciated abroad perhaps even more than in Italy.
FIRSTonline – Which Government reforms have been, in your opinion, most appreciated by the markets and which ones are the most urgent?
PERFUME - the Job Act and the reform of cooperative banks have been very important but the markets are also able to perfectly assess the value of institutional reforms which also have a significant impact on the economy and can finally give Italy a decision-making speed it did not have until now. For the near future I hope that the implementing decrees of the reform of the PA will soon see the light and that priority will be given to the tax authorities and justice. But there is one point that conditions the entire new course of Italian politics and that is the absolute need for stability which I hope will not be compromised by controversies entirely within the parties.
FIRSTonline – Now that you are no longer a banker, how do you judge the state of health of Italian banks?
PERFUME - If we consider that the banks have withstood a frightening crisis in the real economy well, we are almost faced with a miracle, which was by no means a given. Today, the problems are concentrated above all in medium-sized and smaller banks, where the poor quality of governance and the network of conflicts of interest are no longer sustainable. From this point of view, the reform of the major cooperative banks, which has been awaited for almost twenty years, is very important.
FIRSTonline – On the table, and not only for the smaller banks, the mountain of bad debts remains. Will it get to the bad bank?
PERFUME - In a real economy that has plummeted, it was inevitable that bad debts would grow. The bad bank can be an appropriate choice that would finally allow banks to fully clean up their balance sheets and when I see that Europe uses double standards on so-called state aid, as in Germany, I wonder if this Europe is still the same that we want.
