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Gregorio Consoli of Chiomenti added that the legal toolkit has caught up — from almost nothing to a fully continuous spectrum between debt and equity in twenty-five years — but the exercise most often requires alignment on five things: coupon; principal treatment; governance and decision rights; participation in future upside; and exit mechanics. When those five are coordinated with the company's actual plan, value is created; when they are not, it is not.

Roberto Ippolito of Clessidra Private Debt focused on the mid-market opportunity that institutional credit has historically underserved: companies too large for standard bank financing and too small for sponsor-backed unitranche, where succession dynamics and generational change are creating demand. Francesco Vitulano of Blackstone Credit gave the longer view: the majority of Italian private credit to date has been direct lending to sponsor-backed companies, and that will continue, but the growth opportunities are in non-sponsor corporates and, further out, in asset-based finance. The global private credit market is roughly $2 trillion; the addressable market when infrastructure, real assets and the financing need of the digital and energy transitions are included is closer to $30 trillion.

Prono's closing provocation drew from engineering: the real advance is not in naming a new instrument but in ensuring that a CFO — human or AI — knows which instrument matches which need. A company making a long-duration defence investment needs different capital than one running a technology upgrade. The taxonomy is the start; the discipline is knowing when to use which tool.

Key takeaways: For direct dialogue with Italian entrepreneurs, build relationship time into the deal timeline before the term sheet — the hesitation is not financial, it is about control, succession and what happens when the plan does not go as projected. Model the five capital-structure alignment points — coupon, principal, governance rights, upside participation, exit — before presenting a hybrid structure to an entrepreneurial seller; misalignment on any one creates the tension that makes these deals long to close. The next Italian private credit growth market is non-sponsor SMEs and asset-based finance, not incremental sponsor-backed unitranche.

His answer had three parts: proprietary and experiential data accumulated over decades of investments and non-investments; the relational soft skill of being chosen by an entrepreneur, which a machine cannot fake; and the judgment of the investment team, which remains irreplaceable. Fabio Boschi of Quadrivio Group — whose fund is structured in partnership with Microsoft — added that AI functions as a rear-view mirror for the firm's own history, synthesising past deal structures and outcomes and identifying automatable process steps, while leaving the agentic investment decision to humans. His caution was against confusing use-case quantity with transformation: he measures not the number of AI applications a portfolio company runs but the genuine willingness of the entrepreneur to allow the business model itself to be restructured.

Federica Sallorenzo of Fondo Italiano d'Investimento described spending more than a year standardising her SGR's data architecture into a single ERP repository before turning AI on the data — the prerequisite the room had either done or was doing. Giovanni Russo of Vidia Equity gave the operational case: a German platform of 24 companies in industrial site remediation, unified through a custom-built system that generates bid proposals in two hours rather than ten days, with immediate margin impact.

The governance argument from Calia was the sharpest of the session. AI automates cognitive work — the same disruption that mechanised factory floors over centuries. That requires a top-down mandate with clear objectives, process analysis to identify what is automatable, and a human in the loop at every gate. The risks are documented: an Australian advisory firm built a half-million-dollar report on employment policy on a hallucination; a law firm cited non-existent cases in court. Without review, AI is generative and statistically confident, not factually correct.

Key takeaways: Audit your firm's proprietary data as your first AI investment — the funds that compound AI advantage are those that have already structured their historical deal records, not just licensed a model. Govern AI deployment top-down with explicit objectives and human review gates; the efficiency gains are real, but the hallucination risk in diligence materials is documented. Before assessing AI readiness in a portfolio company, test the founder's genuine appetite to restructure the business model — the number of use cases deployed is not the measure.

Riccardo Maria Togni of PwC Italia, twenty years in the sector, set out the cycle. Every Italian infrastructure asset class sits inside a public-private arrangement and the pattern repeats: industrial sponsors find the equilibrium, funds arrive once the model is proven, a regulatory shock resets it, strategics return. Motorways are in that reset now, with regulators cutting returns and what he called a near re-nationalisation across Italy, Spain and France. Livio Fenati of Vesper Infrastructure Partners added the constraint that distinguishes infrastructure from private equity: it is subject to physics. Green hydrogen, direct air carbon capture and ammonia shipping fuel are valid ideas but the technology does not yet deliver adequate returns for adequate risk — that is why so much of the pipeline never became deals.

Lorenzo Prada of EQT gave the pan-European allocator's view, and it was not comfortable. Inflation protection in regulated assets turned out to be programmed rather than real; revenues rose less than investors expected, raising the cost of capital that international funds apply to a jurisdiction. Italy has two further problems for a fund of EQT's size: a population set to fall around 5% by 2050 and structurally lower inflation; and multi-utilities controlling most of the sectors in which EQT invests elsewhere — in water, around 90% of Italians are served by in-house or municipal operators.

On data centres the panel divided by size. Prada described how EQT's EdgeConneX reached final investment decision on 300 MW in Italy — around €3bn — after six years of looking for sites. Training-scale facilities of hundreds of megawatts are almost impossible on Italy's grid; inference sites of around 50 MW have more of a future, though 50 MW is already large for Italy. Togni closed with two asset classes he expects to move: hospitals, where the La Spezia project has restarted a wave of Ligurian tenders on proven concession models, and stadiums ahead of Euro 2032, where tier-two cities like Palermo, Cagliari and Salerno are advancing faster than Rome and Milan.

Key takeaways: Diligence Italian renewables platforms on their readiness to operate post-incentive — energy-management capability, storage plans and supplier relationships — not just on permitting history. Price regulatory volatility explicitly in the cost of capital for Italian regulated assets, and check whether inflation indexation in the concession is real or programmed. Treat Italian data-centre opportunities by size: sub-20 MW assets are unlikely to attract institutional buyers; 50 MW inference sites are the realistic institutional product; development-stage platforms with grid-connected land are where mid-cap capital can play.

The structural adjustment came from the bank. Daniele Moscato of BPER Corporate and Investment Banking sees almost every leveraged buyout in Italy and described a market in which less fundraising and more managers has not reduced deal count but has shrunk ticket size; post-deal leverage sits below 3.5x EBITDA in 53% of cases and below 4.5x in 81%. Luca Deantoni of Renaissance Partners offered that Italy simply never had the zero-rate euphoria other markets did, and Pietro Muzio drew the conclusion: with leverage no longer doing the work, funds have to go back to private equity's origins and take on industrial projects where the value levers are inside the company.

That is where add-ons come in, and where the panel became uncomfortable. Deantoni's firm has completed 107 add-ons across its portfolio since 2015. Moscato then set out what the bank's data shows: add-ons are 65% of the roughly 350 leveraged deals a year; buy-and-build features in around 85% of platform deals and has stopped being a competitive advantage. On the analysis he cited, deals with up to two add-ons show far stronger median returns than those with more; vertical add-ons in the same sector outperform diversifying ones by a wide margin. His inference was that industrial and synergy logic has to drive every bolt-on — and that funding for a two-to-three-year acquisition programme should be structured at day one, with accordion facilities, rather than negotiated deal by deal.

Costanza Cascone of WTW added the tool quietly changing execution: specific-risk insurance that transfers a tax exposure identified in diligence — a withholding-tax liability, a debt push-down after a merger, a grey area in a management incentive plan — to an insurer for a premium. It has grown for two or three years and exploded in the last twelve months, giving both sides price certainty without escrows or indemnities.

Key takeaways: Underwrite each add-on beyond the second on its own industrial logic and integration plan — the bank data suggests that is where median returns deteriorate, and lenders have seen the same numbers. Build the two-to-three-year acquisition funding into the initial structure with accordion capacity, rather than re-opening the debt package for every bolt-on. Where diligence identifies a discrete tax or structural risk, price a specific-risk insurance policy against the alternative of escrow or price reduction — it is now a mainstream tool in Italian mid-market deals.

The count, though, is growing in only one place. Deals above €1bn are stable; so are those between €250m and €1bn. The growth is below €250m, and within that in the smaller tickets and the add-ons made by sponsor-backed platforms. That is the market Valentina Franceschini of Wise Sgr and Filippo Gaggini of Progressio SGR have worked for 25 years, and both had just returned from IPEM in Paris with the same observation: every LP now wants Italian mid-market exposure. Franceschini's explanation was that large deals have "lost the lever of leverage" and investors are chasing alpha through operational levers instead.

Both then turned on their own market. Wise sees roughly 200–250 potential deals a year; a quarter of the last twelve months' flow was in companies below €10m of EBITDA and more than half below €6–7m, and that share is rising. Franceschini's worry is that abundant small opportunities and scarce large ones tempt funds to lower the bar on leadership, differentiation and customer concentration — ending up with assets that performed financially but carry no strategic value at exit. Gaggini agreed and added the add-on version of the same mistake: "mix and match" acquisitions that muddy the exit story. Wise has done nine add-ons in twelve months.

Elena Busson of Chiomenti closed on how the deals are being built. Her practice used to work at entry and exit with organic growth in between; now the transformation happens mid-hold, carve-outs are planned at acquisition, and the traditional exits — IPO, 100% trade sale, five-year hold — are still written into shareholder agreements but no longer believed in. Earn-outs, she observed, close the price gap nominally and feed her litigation department later. Franceschini's answer was to link them only to exit, never to a single year, because entrepreneurs today cannot forecast twelve months through wars and tariffs.

Key takeaways: Underwrite Italian mid-market platforms on the quality of the core business case without add-ons, then treat add-ons as upside and risk mitigation — not as the equity story. When the target is small, diligence leadership depth, product differentiation and customer and country concentration harder than the numbers, because those determine strategic value at exit. Expect earn-outs, vendor instruments, sweet equity and exit ratchets to be doing more work in price negotiations this year; link earn-outs to exit outcomes rather than annual targets to keep the entrepreneur aligned.

Then he handed the microphone to a client who sits at the intersection of all three. Giulio Ranzo has run Avio through a SPAC listing in 2017, its Arianespace partnership, a push into the United States and, most recently, the arrival of Advent as a shareholder. His reading of the market was blunter than the host's. The instability did not begin with the Trump era: Avio saw demand for traditional defence products spike at the end of 2020, well before the invasion of Ukraine. What has changed since is that defence, security, space, space-based telecoms and AI now behave as one industrial continuum — obvious in the United States, where the consolidation has already happened, and still treated as separate verticals in Europe.

Avio's response was to diversify from space into defence and to commit to a production site in the US, financed by a capital increase equal to roughly 40% of its market capitalisation. Ranzo expected that to be hard. Instead he raised about €500m and found the constraint was on the other side: in meetings with dozens of US investors, his half-billion-euro raise was smaller than the minimum ticket some would consider. Nobody, he said, asked about profit multiples. Every conversation was about growth stories.

That is where the session turned from celebration to warning. Strip out the one-off mega-deals — the Monte dei Paschi/Mediobanca and Poste/TIM transactions that Ranzo does not expect to recur annually — and the average Italian deal is around €50m, the European average perhaps double that, and the American average about six times the Italian figure. A US acquirer with that capital can, as he put it, come shopping in Italy with resources that are not imaginable at our scale, and most of the cross-border activity he sees runs into Italy rather than out of it. His prescription was structural: fewer, larger and more liquid European listing venues, a way through the family-succession trap that blocks consolidation among Italy's decentralised small and mid-sized champions, and less regulatory layering. Golden Power, a foreign-investment screening tool that once applied to two or three defence companies, now, in his exaggeration, reaches the sale of a tobacconist.

Modulo closed on the failures that actually kill deals. The procedure is explainable; the mismatch is not. Italy's tender-offer timetable under CONSOB does not synchronise with antitrust clearance for industrial deals — banking has a suspension mechanism, industry does not — and he has watched large US strategic buyers abandon mandatory-offer structures because of it. Add multi-jurisdictional foreign-direct-investment reviews with unknowable timelines and unexpected reinterpretations — Telecom Italia reclassified as defence-relevant overnight in August 2017, the "Taranto norms" at ILVA that were stricter than EU law — and you have the real ceiling on Italy's ambition to be an M&A hub. What struck the room was that neither speaker doubted the quality of the assets. Both doubted whether Italy can stay the buyer rather than the target.

Key takeaways: Underwrite Italian defence, space and connectivity targets as one continuum — the buyer universe, the growth multiple and the US-capital competition all follow that logic, even when the target's own segment reporting does not. Treat regulatory sequencing as a structuring risk, not a closing formality: model the gap between CONSOB tender-offer timing, antitrust clearance and multi-country FDI review before committing to a mandatory-offer route. In a market where US buyers price growth stories and Italian sellers price EBITDA multiples, expect valuation disputes at the term-sheet stage and prepare the equity story for both audiences.