Italy's Natural Private Market That Still Lacks Its Infrastructure

Italy's Natural Private Market That Still Lacks Its Infrastructure

Succession, governance and patient capital to protect and grow strategic SMEs.

Italy is not just a country of SMEs. It is, in fact, a natural private market that has yet to build its own coherent financial infrastructure. Micro and small enterprises account for about 99% of companies, generate over 60% of added value, and employ about 75% of workers. Within this fabric, the family business is the norm: between 85% and 90% of companies are family-controlled.

The numbers on generational transition are stark: only 30% of family businesses survive the first transition, and just 3% make it to the third generation. A recent estimate indicates that 92% of Italian family SMEs will face succession in the coming years and only 18% have a structured process. In a country where almost all businesses are SMEs and almost all SMEs are family-owned, every succession is a systemic event.

In many sectors, Italy has built global niches with high added value: foundries and precision mechanics, advanced processing for automotive and aerospace, components, manufacturing for design and fashion, quality agrifood. These are companies with a few tens of millions in revenue but a density of know-how that is hard to replicate, true "pocket multinationals". They are of little interest to global conglomerates—too specific, too based on tacit knowledge—and at the same time too small and fragmented for large global capital, which thinks in terms of tickets worth hundreds of millions.

The result is that the country's most precious asset is structurally undercapitalized and under-governed, despite generating healthy cash flows and high potential margins.

The Stock Market Is Not the Answer

The reflexive response is: "let's go public." But for most Italian SMEs, the stock market is a mirage. At the end of 2024, the entire market was worth about €836 billion, just over a fifth of Nvidia and a third of Amazon: a signal of insufficient depth in the equity market.

On the Euronext Growth segment, dedicated to SMEs, the average market cap at IPO is around €40 million, with free floats of about 20%: for many companies, the effectively tradable capital is reduced to €10–15 million. This results in thin trading, prices often disconnected from fundamentals, and difficulty in making serious capital increases. The growth in delistings indicates that it's not individual issuers that don't work—it's the architecture.

"Telling an SME that wants to grow and aggregate 'go public and solve it' is, in most cases, the wrong answer to the right question."

The Paradox of Italian Savings

Meanwhile, Italian households have exceeded €6,000 billion in financial wealth, with over €1,300 billion accumulated since 2019. A significant portion is invested in products with global underlyings that allocate predominantly abroad, while Italian SMEs continue to rely on self-financing and short-term bank debt, with very little equity.

The country lives a paradox: the capital generated by the Italian real economy cannot find structured channels to return to the Italian real economy.

Private Capital: Does It Work, and How?

In this scenario, private capital itself is not the problem: KPMG–AIFI data indicate an average IRR of around 18–20% over the last ten years. The asset class, on paper, is capable of generating high returns and attracting part of long-term savings.

But the question is not whether private capital "works": it's how you build it. If returns come mainly from multiple expansion and deleveraging, and little from industrial improvement, the robustness of that IRR is much less solid. A structural imbalance toward deleveraging means using cash flow for financial cosmetics—paying down debt and "pumping up" the multiple—rather than for plants, technology, people, R&D, i.e., for the industrial competitiveness that creates real wealth for the system.

The Entrepreneur-Capital-Management Triangle

As a manager working at the intersection of technology, finance and industry, I come to a simple conviction: finance alone is not enough, but neither is entrepreneurship alone. What is needed is a balanced triangle between entrepreneur, capital and management.

Minority investment with well-defined board rights is a key lever. It's not about stopping at 30% out of timidity, but about building a balance where the family remains the reference shareholder, private capital enters with a significant but non-totalitarian stake, sits permanently on the board, has a voice on industrial plan, supply chain M&A and capital allocation. The goal is not to replace the entrepreneur, but to put the company in a position to survive and grow beyond its generation.

Askéon Capital: Our Proposal

It is in this perspective that Askéon Capital was born. Askéon positions itself as an industrial partner, of companies considered "micro" (between €3 and €30 million in revenue) but with enormous industrial and strategic potential, not as a flipping vehicle.

We work with entrepreneurs, not against them, keeping families as reference shareholders and placing third-party capital in an active minority position. Value creation is not entrusted to multiple expansions, but to four concrete levers:

• Structural margin improvement
• Revenue quality and diversification
• Invested capital efficiency
• Financial and supply chain resilience

"In a country where SMEs represent 99% of companies, this is not a niche strategy: it is, essentially, industrial policy done with private tools."

Conclusion: The Time Is Now

In the next five to ten years, Italy is playing a decisive part of its industrial future. We can continue with episodic interventions, letting capital come and go according to global logic, or consciously decide to become a country of organized private markets, where Italian savings finance, with adequate returns, the companies that truly make the country.

In the end, the difference between an operation that generates IRR by slowly emptying a piece of Italy and an operation that produces the same IRR by strengthening its industrial backbone is not made by slogans, but by architecture: financial, industrial and managerial integrated into decisions.

The time to choose is not "when rates fall" or "when the stock market recovers." The time is now.

For more information: investments@askeon.capital