Atlante (private Equity Fund)
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Atlante is an Italian banking sector owned bail-out equity fund that is dedicated to recapitalize some Italian banks, as well as purchase the
securities A security is a tradable financial asset. The term commonly refers to any form of financial instrument, but its legal definition varies by jurisdiction. In some countries and languages people commonly use the term "security" to refer to any for ...
of the
junior Junior or Juniors may refer to: Aircraft * Ekolot JK-05L Junior, a Polish ultralight aircraft * PZL-112 Junior, a Polish training aircraft * SZD-51 Junior, a Polish-made training and club glider Arts and entertainment Characters * Bowser Jr., ...
tranches of non-performing loans. It was established in 2015 in response to the Italian bad debt crisis of that year. The fund was under regulation by the EU
Alternative Investment Fund Managers Directive Alternative Investment Fund Managers Directive 20112011/61/EU is a directive (European Union), directive of the European Union on the financial regulation of hedge funds, private equity, real estate funds, and other "Alternative Investment Fund ...
. According to Federico Ghizzoni, former CEO of UniCredit, although the bank may inject €1 billion to the fund, the bank had a priority to sell their bad loan to the fund. UniCredit had about €20 billion net value of bad loans on the balance sheets as of 31 December 2015. Moreover, both UniCredit and Intesa Sanpaolo (via Banca IMI) were already underwritten Banca Popolare di Vicenza and
Veneto Banca Veneto Banca S.p.A. is a former Italian bank headquartered in Montebelluna, Italy and currently a wind-down unit. The bank changed from a Cooperative banking, cooperative society to a limited company in December 2015. Following a failed stock mar ...
for a combined €2.5 billion capital increase. The contributions of the fund would make the fund become the buyer of the unsold shares, instead of the banks themselves. As BPVi announced that the new shares would be priced between €3 and €0.1 per share, the fund on behalf of UniCredit would purchase the unsold share for €0.1 only. It was reported that banking foundations, such as
Fondazione Cariplo Fondazione Cariplo is a charitable foundation in Milan, Italy. It was created in December 1991 when the Amato law, Law no. 218 of 30 July 1990, came into force. Under this law, saving banks were required to separate into a not-for-profit foun ...
,
Fondazione Cariparo Fondazione Cassa di Risparmio di Padova e Rovigo (in short Cariparo) is an italian philanthropic organization formed in 1991. It was formed by separating the Cassa di Risparmio di Padova e Rovigo into two separate entities: a limited company that ...
, and
Fondazione CRT Fondazione Cassa di Risparmio di Torino (Fondazione CRT) is a charity organization formed in 1991 by the spin off of the bank activities Cassa di Risparmio di Torino into Banca CRT S.p.A. (a limited company), with the original statutory corporation ...
, which in previous banking reforms were forced to sell their banking subsidiaries (forced to diversify investments), were invited to invest in the fund. According to
ACRI Acri ( Calabrian: ) is a city with 19,949 inhabitants, located in the northern part of the Calabria region in southern Italy. Acri was granted city status on 17 September 2001. The etymology of the word ''Acri'' derives from the Greek word 'αΠ...
, the foundations had €40 billion shareholders' equity, with most of them no longer owning their banks in majority or entirely sold. Fondazione Cariplo, a shareholder of Intesa Sanpaolo and the management firm of the fund, had a shareholders' equity of €8.9 billion. On 29 April 2016
Quaestio ''Quaestio'' is an annual peer-reviewed open access academic journal of philosophy with a particular emphasis on the history of metaphysics. it was established in 2002 and is published by Brepols. Its editors are Pasquale Porro and Constantino E ...
announced that the fund had collected €4.249 billion from 67 investors including
Cassa Depositi e Prestiti Cassa Depositi e Prestiti S.p.A., also known as CDP S.p.A., is a prominent Italian development bank founded on November 20, 1850, in Turin. Its original duty was to finance public works like roads and waterworks during the reign of Victor Emman ...
.


Backgrounds


Bad debt crisis of Italy

The Italian banking sector suffered from the impact of the recession of the country. According to
Banca d'Italia The Bank of Italy (Italian language, Italian: ''Banca d'Italia'', , informally referred to as ''Bankitalia'') is the National central bank (Eurosystem), national central bank for Italy within the Eurosystem. It was the Italian central bank from ...
(the central bank), the non-performing loans (NPLs) of the whole banking system stood at €360 billion gross book value in December 2015 (peaked in September 2015) with more than half being ''sofferenze'' (€210 billion, means bad loan). On average, the total NPLs to total loans ratio was 18%, the highest among European Union. The five largest banking groups (by total assets),
UniCredit UniCredit S.p.A. (formerly UniCredito Italiano S.p.A.) is an Italian multinational banking group headquartered in Milan. It is a systemically important bank (according to the list provided by the Financial Stability Board in 2022) and the world' ...
,
Intesa Sanpaolo Intesa Sanpaolo Società per azioni, S.p.A. is an Italian international banking group. It is Italy's largest bank by total assets and the world's 27th largest. It was formed through the merger of Banca Intesa and Sanpaolo IMI in 2007, but has a ...
,
Banca Monte dei Paschi di Siena Banca Monte dei Paschi di Siena S.p.A. (), known as BMPS or just MPS, is an Italian bank. Tracing its history to a mount of piety founded in 1472 () and established in its present form in 1624 (), it is the world's List of oldest banks, oldest ...
(BMPS),
UBI Banca Unione di Banche Italiane S.p.A., commonly known for its trading name UBI Banca, was an Italian banking group, the fifth largest in Italy by number of branches. It was formed on 1 April 2007 from the merger of the Banche Popolari Unite (trading ...
and
Banco Popolare Banco Popolare Società Cooperativa was an Italian bank, formed in 2007 from the merger of Banco Popolare di Verona e Novara (BPVN) and Banca Popolare Italiana (BPI). The bank merged with Banca Popolare di Milano on 1 January 2017. to form Banco ...
, had €225 billion of NPLs (€135 billion were bad loans among the NPLs) in gross book value in that period. While among the large to medium banks (total assets larger than €21.5 billion, minus the top five banksBanca d'Italia did not disclose the full list, but roughly equal to 9 others banks that were supervised by
European Central Bank The European Central Bank (ECB) is the central component of the Eurosystem and the European System of Central Banks (ESCB) as well as one of seven institutions of the European Union. It is one of the world's Big Four (banking)#International ...
directly, plus BNL, Cariparma,
Crediop Dexia Crediop S.p.A. was an Italian bank specializing in financing public infrastructure which was part of Dexia Group, and disappeared in 2023 in the context of Dexia's orderly resolution plan. History Consorzio di Credito per le Opere Pubbliche ...
, Deutsche Bank S.p.A. (subsidiaries of foreign banking group),
Banca Mediolanum Banca Mediolanum S.p.A. is an Italian bank, insurance and asset management conglomerate which is the parent company of Gruppo Mediolanum (Mediolanum Group). The CEO of the company is Massimo Antonio Doris, and the bank is listed on the Borsa Ital ...
and
Credito Valtellinese Credito Valtellinese (known as Creval) was an Italian bank based in Sondrio (in Lombardy, Italy) prior to its acquisition by Crédit Agricole Italia in 2021. The company was a former component of FTSE Italia Mid Cap Index of the Borsa Italiana ...
) had a total NPL of €76 billion and €41 billion bad loan in gross book value. For example,
Banca Popolare dell'Emilia Romagna BPER Banca S.p.A., formerly known as Banca Popolare dell'Emilia Romagna S.C., is an Italian banking group offering traditional banking services to individuals, corporate and public entities. The company is based in Modena and is a constituent of ...
's gross NPLs to total loan ratio was 23.28% or €11.395 billion in size. If including the data from large to micro banks (whole system minus top 5 banks), the gross book value of NPLs was €135 billion, €75 billion of them were bad loans. At the same time in order to boost the securitization of bad loans, the Italian government had guaranteed the
senior Senior (shortened as Sr.) means "the elder" in Latin and is often used as a suffix for the elder of two or more people in the same family with the same given name, usually a parent or grandparent. It may also refer to: * Senior (name), a surname ...
tranche of the securitizated NPLs. (Garanzia sulla Cartolarizzazione delle Sofferenze), which in line with the strict rule of state aid by the European Union, as junior tranche was excluding from the guarantee scheme. Usually the riskiest junior tranche would be repurchased by the banks themselves. However, a plan to disposal all tranches was planned, which Atlante was aiming for junior tranches. Additionally, the bail-out of
Banca delle Marche Banca Adriatica S.p.A. trading as UBI Banca Adriatica and formerly known as Nuova Banca delle Marche S.p.A. was an Italian bank based in Jesi, Marche region. It has operations in several regions in central Italy, but concentrated in Marche region ...
, CariChieti, CariFerrara and Banca Etruria along with the four small-sized banks (definition of small: total assets between €21.5 billion and €3.6 billion), had to write down €8.5 billion of bad loans to €1.5 billion (and transferred to a "bad bank",
REV - Gestione Crediti Rev, REV or Rév may refer to: Abbreviations Rev. * Rev., an abbreviation for revolution, as in Revolutions per minute * Rev., an abbreviation for the religious style The Reverend * Rev., the abbreviation for Runtime Revolution, a development en ...
, a company without banking license, in early 2016), causing Italian National Resolution Fund for about €3.7 billion capital injection and recapitalization, as well as the bail-in of shareholders and subordinate bond investors. (The retail investors of the bonds were only refurbished in mid-2016.)


New shares facing low demands

Moreover, among the first 14 largest Italian banks that were supervised by the European
Central Bank A central bank, reserve bank, national bank, or monetary authority is an institution that manages the monetary policy of a country or monetary union. In contrast to a commercial bank, a central bank possesses a monopoly on increasing the mo ...
directly, they were required a higher CET1 ratio after Supervisory Review and Evaluation Process (such as over 10% CET1 ratio for BMPS). and Banca Popolare di Vicenza). In 2015 banks such as BMPS (for about €3 billion) and Banca Carige were recapitalized. In 2016 three of the aforementioned 14 banks, Banco Popolare, Banca Popolare di Vicenza and Veneto Banca, also announced the plan of recapitalization of €1 billion, €1.5 billion and €1 billion respectively. BP Vicenza and Veneto Banca were underwritten by UniCredit and
Banca IMI Banca IMI is a subsidiary of Intesa Sanpaolo which is specialized in investment banking and capital markets. The bank can trace its origins to the Istituto Mobiliare Italiano. IMI merged with Istituto Bancario San Paolo di Torino to form Sanpaolo ...
(Intesa Sanpolo) respectively, Italy's two largest banks. However, as most of the banks were under-capitalized, market capitalization of the banks was under their equity value, plus a low profit margin, making the new shares of BP Vicenza may be purchased by UniCredit entirely due to low demand, triggering a domino effect that caused UniCredit to recapitalize itself.


European Commission attitude towards state aid

In December 2015 the European Commission ruled that the bail-out of
Banca Tercas Banca Tercas, formerly known as Cassa di Risparmio della Provincia di Teramo was an Italian savings bank based in Teramo, Abruzzo. On 1 January 2011 the bank purchased fellow savings bank Banca Caripe from Banco Popolare. The enlarged banking grou ...
by the
Fondo Interbancario di Tutela dei Depositi Fondo () is a ''Communes of Trentino, comune'' (municipality) in Trentino in the northern Italy, Italian region Trentino-Alto Adige/Südtirol, located about north of Trento, precisely at the northern limit of the Val di Non. Fondo borders the f ...
(FITD in short; mandatory deposit guarantee fund) was state aid. The commission also ruled that the aid affected the market's effectiveness, thus the banks must return the aid to the deposit guarantee fund. Any bail-out by the government must be in line with the EU's new
Bank Recovery and Resolution Directive A bank is a financial institution that accepts deposits from the public and creates a demand deposit while simultaneously making loans. Lending activities can be directly performed by the bank or indirectly through capital markets. As ba ...
. However, the bail-out of
Banca delle Marche Banca Adriatica S.p.A. trading as UBI Banca Adriatica and formerly known as Nuova Banca delle Marche S.p.A. was an Italian bank based in Jesi, Marche region. It has operations in several regions in central Italy, but concentrated in Marche region ...
, CariChieti, CariFerrara and Banca Etruria by the government (though utilized the mandatory contribution of all Italian banks), also bail-in of shareholders and subordinated bond holders, had caused public controversy that many bond holders were actually retail investors, making the Bank Recovery and Resolution Directive unpopular as a tool to bail out the bank. A private bail-out fund must be created to solve the problem of the banking system. In early 2016, FITD added a voluntary scheme in its article of associations, which bail out Banca Tercas by voluntary contribution of the member banks of FITD. (It was followed by
Cassa di Risparmio di Cesena Cassa di Risparmio di Cesena S.p.A. also known as Carisp Cesena in short, was an Italian savings bank based in Cesena, in the province of Forlì-Cesena, Emilia-Romagna region. The bank had branches mostly in Emilia-Romagna region (87%; Forlì-Ce ...
, a small bank in mid 2016) Even before the introduction of the voluntary scheme, FITD officials had also declared that the fund could not bail out the aforementioned four banks entirely, due to the fund's small size. The resolution fund bailed out the banks by €3.7 billion only were in fact aided by bail-in. A large private equity fund was demanded if large to medium-sized banks of Italy were required to be bailed out. Atlante was aimed at a size of €4-6 billion with a promise that the investment was profitable in order to attract investors in market condition.


Responses

Fitch Ratings Fitch Ratings Inc. is an American credit rating agency. It is one of the three nationally recognized statistical rating organizations (NRSRO) designated by the U.S. Securities and Exchange Commission and is considered as being one of the " Bi ...
announced that the contributions to the fund may weaken the large banks. While
Reuters Reuters ( ) is a news agency owned by Thomson Reuters. It employs around 2,500 journalists and 600 photojournalists in about 200 locations worldwide writing in 16 languages. Reuters is one of the largest news agencies in the world. The agency ...
, ''
Financial Times The ''Financial Times'' (''FT'') is a British daily newspaper printed in broadsheet and also published digitally that focuses on business and economic Current affairs (news format), current affairs. Based in London, the paper is owned by a Jap ...
'' expressed that Italian banking problem is too big for the fund.


Operations


First capital increase

On 15 April 2016
Intesa Sanpaolo Intesa Sanpaolo Società per azioni, S.p.A. is an Italian international banking group. It is Italy's largest bank by total assets and the world's 27th largest. It was formed through the merger of Banca Intesa and Sanpaolo IMI in 2007, but has a ...
announced that the bank would invest €800 million to €1,000 million in the fund, with the total size of the fund to vary from €4 billion to €6 billion. On the same day
Banca Popolare di Milano Banca Popolare di Milano S.p.A. also known as Bipiemme or just BPM is an Italian bank based in Milan, Lombardy. The bank is a wholly owned subsidiary of Banco BPM. Banca Popolare di Milano S.c. a r.l., an urban area cooperative bank, was founded ...
,
Banca Popolare dell'Emilia Romagna BPER Banca S.p.A., formerly known as Banca Popolare dell'Emilia Romagna S.C., is an Italian banking group offering traditional banking services to individuals, corporate and public entities. The company is based in Modena and is a constituent of ...
,
Credito Valtellinese Credito Valtellinese (known as Creval) was an Italian bank based in Sondrio (in Lombardy, Italy) prior to its acquisition by Crédit Agricole Italia in 2021. The company was a former component of FTSE Italia Mid Cap Index of the Borsa Italiana ...
,
Banca Monte dei Paschi di Siena Banca Monte dei Paschi di Siena S.p.A. (), known as BMPS or just MPS, is an Italian bank. Tracing its history to a mount of piety founded in 1472 () and established in its present form in 1624 (), it is the world's List of oldest banks, oldest ...
, and
Banca Carige Banca Carige S.p.A., historically known as Cassa di Risparmio di Genova e Imperia (Ca.Ri.Ge.) was an Italian bank based in Genoa, with more than 500 bank branches in Italy, prior to its acquisition by BPER Banca in February 2022. The predecess ...
announced that the bank would invest €100 million, €100 million, €60 million, €50 million and €20 million respectively in the fund. On the following Monday, a €200 million investment from
UBI Banca Unione di Banche Italiane S.p.A., commonly known for its trading name UBI Banca, was an Italian banking group, the fifth largest in Italy by number of branches. It was formed on 1 April 2007 from the merger of the Banche Popolari Unite (trading ...
was announced. On the same day
UniCredit UniCredit S.p.A. (formerly UniCredito Italiano S.p.A.) is an Italian multinational banking group headquartered in Milan. It is a systemically important bank (according to the list provided by the Financial Stability Board in 2022) and the world' ...
formally announced that the fund would be sub-underwriting the IPO of
Banca Popolare di Vicenza Banca Popolare di Vicenza (BPVi) was an Italian bank and currently a winding-down company. The banking group along was the 15th-largest retail and corporate bank of Italy by total assets at 31 December 2016, according to Mediobanca. However, its si ...
.


Recapitalizing banks

Atlante subscribed the entire capital increase of BPVi (for €1.5 billion) after Borsa Italiana rejecting the listing of the bank. Offer other than Atlante were voided after the listing in the Borsa was denied. It was followed by purchasing most of the new shares of
Veneto Banca Veneto Banca S.p.A. is a former Italian bank headquartered in Montebelluna, Italy and currently a wind-down unit. The bank changed from a Cooperative banking, cooperative society to a limited company in December 2015. Following a failed stock mar ...
(€988,582,329.50), which some investors of the new shares other than Atlante, excised their rights to withdraw after the listing to the Borsa also failed. Following the announcement of annual Supervisory Review and Evaluation Process (SREP), which BPVi and Veneto Banca were barely above the new Tier 1 Capital requirement (10.75% and 10.74% respectively, verse required 10.25% Atlante deposited €310 million and €628 million respectively to the banks as advanced payments for future capital increases. However, it was insufficient for the two banks, which saw the investment of Atlante in the two banks were bailed-in, and the good assets of the two banks were acquired by Intesa Sanpaolo, by a government funded bail-out of the depositors.


Management

The fund was managed by Quaestio Capital Management SGR S.p.A., a wholly owned subsidiary of Quaestio Holding S.A., which was owned by
Fondazione Cariplo Fondazione Cariplo is a charitable foundation in Milan, Italy. It was created in December 1991 when the Amato law, Law no. 218 of 30 July 1990, came into force. Under this law, saving banks were required to separate into a not-for-profit foun ...
(37.65%), Fondazione Cassa dei Risparmi di Forlì (6.75%), (18%), Locke S.r.l. (22%) and Direzione Generale Opere Don Bosco (15.60%) as of 2018.


Shareholders

*
Intesa Sanpaolo Intesa Sanpaolo Società per azioni, S.p.A. is an Italian international banking group. It is Italy's largest bank by total assets and the world's 27th largest. It was formed through the merger of Banca Intesa and Sanpaolo IMI in 2007, but has a ...
(€845 million) *
UniCredit UniCredit S.p.A. (formerly UniCredito Italiano S.p.A.) is an Italian multinational banking group headquartered in Milan. It is a systemically important bank (according to the list provided by the Financial Stability Board in 2022) and the world' ...
(€845 million) *
Cassa Depositi e Prestiti Cassa Depositi e Prestiti S.p.A., also known as CDP S.p.A., is a prominent Italian development bank founded on November 20, 1850, in Turin. Its original duty was to finance public works like roads and waterworks during the reign of Victor Emman ...
(€500 million) * Poste Vita (€260 million) *
UBI Banca Unione di Banche Italiane S.p.A., commonly known for its trading name UBI Banca, was an Italian banking group, the fifth largest in Italy by number of branches. It was formed on 1 April 2007 from the merger of the Banche Popolari Unite (trading ...
(€200 million) *
Banco BPM Banco BPM S.p.A. is an Italian bank that commenced operations on 1 January 2017, by the merger (approved by the board of directors on 24 May 2016) of Banco Popolare and Banca Popolare di Milano (BPM). The bank is the third largest retail and cor ...
(€150 million) *
BPER Banca BPER Banca S.p.A., formerly known as Banca Popolare dell'Emilia Romagna S.C., is an Italian banking group offering traditional banking services to individuals, corporate and public entities. The company is based in Modena and is a constituent of ...
(€100 million) *
UnipolSai UnipolSai Assicurazioni S.p.A. was an Italian financial services company based in Bologna and founded in 2014, which was part of Unipol Group. In December 2024, Unipol completed the reorganisation of the group with the merger by incorporation o ...
(€100 million) * (€100 million) *
Fondazione Cariplo Fondazione Cariplo is a charitable foundation in Milan, Italy. It was created in December 1991 when the Amato law, Law no. 218 of 30 July 1990, came into force. Under this law, saving banks were required to separate into a not-for-profit foun ...
(€100 million) *
Credito Valtellinese Credito Valtellinese (known as Creval) was an Italian bank based in Sondrio (in Lombardy, Italy) prior to its acquisition by Crédit Agricole Italia in 2021. The company was a former component of FTSE Italia Mid Cap Index of the Borsa Italiana ...
(€60 million) * Banca Popolare di Sondrio (€50 million) *
Banca Monte dei Paschi di Siena Banca Monte dei Paschi di Siena S.p.A. (), known as BMPS or just MPS, is an Italian bank. Tracing its history to a mount of piety founded in 1472 () and established in its present form in 1624 (), it is the world's List of oldest banks, oldest ...
(€50 million) *
Fondazione CRT Fondazione Cassa di Risparmio di Torino (Fondazione CRT) is a charity organization formed in 1991 by the spin off of the bank activities Cassa di Risparmio di Torino into Banca CRT S.p.A. (a limited company), with the original statutory corporation ...
(€50 million) *
Banca Mediolanum Banca Mediolanum S.p.A. is an Italian bank, insurance and asset management conglomerate which is the parent company of Gruppo Mediolanum (Mediolanum Group). The CEO of the company is Massimo Antonio Doris, and the bank is listed on the Borsa Ital ...
(€50 million) *
Allianz Allianz SE ( , ) is a German Multinational corporation, multinational financial services company headquartered in Munich, Germany. Its core businesses are insurance and asset management. Allianz is the world's largest List of largest insurance ...
(€50 million) * CreditRas Vita (€50 million) *
Cattolica Assicurazioni Cattolica Assicurazioni is an Italian insurance company. Founded in 1896, the company was listed on the FTSE Italia Mid Cap index of the Milan Stock Exchange from November 27, 2000, to August 12, 2022. Acquired by Generali in 2022 and merged ...
(€40 million) *
Banca Carige Banca Carige S.p.A., historically known as Cassa di Risparmio di Genova e Imperia (Ca.Ri.Ge.) was an Italian bank based in Genoa, with more than 500 bank branches in Italy, prior to its acquisition by BPER Banca in February 2022. The predecess ...
(€20 million) * Fondazione Cariparma (€20 million)


Atlante II

On 8 August 2016 the second fund, Atlante II, had raised €1.715 billion in order to finance the purchase of NPLs. On 28 August 2016 the fund manager employed Credito Fondiario as service provider in NPLs. On 29 July 2016 Atlante signed a memorandum of understanding to buy the mezzanine notes of the securitized bad loan portfolio of
Banca Monte dei Paschi di Siena Banca Monte dei Paschi di Siena S.p.A. (), known as BMPS or just MPS, is an Italian bank. Tracing its history to a mount of piety founded in 1472 () and established in its present form in 1624 (), it is the world's List of oldest banks, oldest ...
. BMPS was the weakest banks among the 51 banks of 2016 European Union bank stress test. The deal was finalized in 2018, with Atlante II was the actual buyer, for 95% mezzanine notes for a purchase price of €805 million. In 2017, Atlante II was renamed to Italian Recovery Fund. The fund purchased the NPLs from the savings banks from Cesena, Rimini and San Miniato. The three banks were purchased by
Crédit Agricole Italia Crédit Agricole Italia S.p.A., formerly Crédit Agricole Cariparma S.p.A., is an Italian banking group, a subsidiary of French banking group Crédit Agricole. Crédit Agricole Italia was ranked as the 11th largest bank in Italy by total assets a ...
with a condition to clean-up the NPLs before the deal.


Footnotes


References


External links


Official site of Quaestio Capital Management SGR
{{Banking in Italy Banking in Italy Banca Popolare di Vicenza