Business Development Director Raimondo Gaetani
By Jarrett Banks
Italian real estate trophy assets such as hotels are under fire from US hedge funds. The country stands alone in Europe for having so many prime destinations like Florence, Venice, Rome, Milan and Capri, not to mention Sardegna, Puglia, Sicily and the Amalfi Coast. These generate the portfolio value investors are searching for.
Patrimonia Real Estate Investment SA, a boutique private equity firm founded by Niccolò Belingardi Clusoni, has chalked up some of the biggest deals in Italy post-Covid. Executive Edge sat down with Patrimonia’s London-based Business Development Director Raimondo Gaetani to learn more.
Exec Edge: What is the opportunity with Italian luxury hotels?
Italy is one of the world’s favorite holiday destinations, and nothing will change that for a long time to come. However, the Italian luxury hotel market was already tired pre-Covid, with a major upgrade necessary in order to compete with other world class destinations, as far the hotels are concerned. And I’m not saying my hometown of Rome isn’t still, and won’t forever remain, the most incredible city on earth, but if these investments aren’t made then in 10 years, cities like it will become less competitive.
Secondly, the negligible opportunity cost of trading and repositioning during the Covid period is a logical play for anyone trying to enter the market. This is where I have focused my attention by partnering with the investors capable of seizing this generational opportunity.
Exec Edge: You’ve found yourself dealing with families, what is the perception in the market of how you and Patrimonia run your business?
Sadly, we are deemed vultures, seducing families out of their assets at distressed prices. Of course, this is ridiculous for a variety of reasons. Firstly, we bring needed liquidity to the market that goes to renovate and reposition immovable assets. In other words, we are developers and our aim is to unlock value, and of course that value doesn’t go anywhere and benefits the local economy as well.
Secondly, as in our latest deal, we can engineer further opportunities for local operators to build a pipeline with our real estate partners outside of Italy, because in the same way we help foreign capital invest in Italy, we also want the best Italy has to offer to take its deserved place in the top locations worldwide.
Exec Edge: What’s the difference between what Patrimonia does and all the other players in the market?
I’d say three main things: Founder & CEO Niccolò and I move more easily between originating deals, sourcing capital, development and asset management. We protect our capital through every aspect of the asset life cycle as a priority.
We mix an institutional approach with a native understanding of how families work. In fact, half of our deals were done representing families and the other institutional investors. Niccolò comes from an institutional background and Patrimonia applies this approach to its daily workflow, paying close attention to budgeting, starting from quantitative modelling but honing in on details exactly how a family office would. This has allowed us to extrapolate additional returns by saving from every single cost along the process. Our deals have had an average 20% IRR as a result.
It’s 10 and 27 years respectively that we’ve been based outside Italy, but are Italian born and raised, which gives a good understanding of how to navigate the Italian market. Call us next generation translators for global trends entering Italy. I would say this is the most important factor.
Exec Edge: What’s 2021 looking like for you?
We’ve closed almost a quarter of a billion in 2020, and 2021 is set to be a big opportunity for our sector so we are just going to focus on building quality pipelines for our investors and open up the market for new ones, all looking to add value and deliver incredible projects for my home country.
We will also be dedicating time to continued business with the Reuben Brothers, for whom we will be bringing the next three Baglioni hotels to Europe and North America after our acquisition of the Baglioni Luna in Venice in December for seven figures.
Jarrett Banks, Editor-at-Large