From Family Ownership to Scalable Growth: H.I.G. Italy’s Raffaele Legnani on Winning in Italy’s PE Landscape
With 30 years of experience in private equity, Raffaele Legnani, Managing Director of H.I.G. Italy, has witnessed multiple economic cycles. In this interview, he shares how the Italian mid-market companies are navigating today’s environment, why family businesses are increasingly open to private equity, and how H.I.G. is driving growth through consolidation, internationalization, and digital transformation.
You’ve seen many cycles in private equity. How does today’s interest rate environment compare?
In the European context, interest rates around 2% are reasonable. The zero-rate era was an anomaly and not particularly healthy or instructive for the market. Moderate rates encourage discipline in capital allocation and support sustainable growth.
Today, financing for high-quality projects is readily available. Commercial banks continue to support lower mid-market companies, and private debt funds have significantly reduced their pricing over the past few years, making them highly competitive now.
The main difference from past cycles is today’s exceptionally high level of public debt across major economies, not only in Italy and Japan, where it has long been a feature, but also in countries such as France, the United States, and the United Kingdom. This represents a very concerning macroeconomic risk and creates uncertainty.
How does that uncertainty affect your business?
Uncertainty is the toughest challenge for investors. High public debt limits public spending, increases default risks, and reduces long-term visibility, exactly what financial investors need most.
With fewer “easy exits,” what are you focusing on to build value?
We generally do not rely on “easy exits” to generate returns. Our approach has always been centered on creating value through operational and strategic improvements.
We prioritize three main areas:
Buy-and-build strategies consolidating fragmented markets, which have delivered excellent results to us in Italy so far.
Internationalization, helping quality companies expand abroad;
Digital transformation is a key driver of efficiency, scalability, and profitability.
What exit routes are you pursuing in Italy?
The traditional ones: trade sales, IPOs, and secondary sales. Strong companies with compelling growth prospects always attract buyers.
The current slowdown in exits is mainly due to valuation gaps, not lack of demand. When quality businesses come to market at fair prices, demand is strong and capital is available.
And what about continuation funds?
They can be useful when an asset needs more time to reach its potential. For us, however, they’re an exception rather than standard practice.
Are Italian family-owned businesses more open to partnering with private equity funds today?
Yes, absolutely. In Italy, there is a growing awareness that the traditional “small is beautiful” mindset no longer works in a global market.
To compete globally, companies need scale to finance investments, attract talent, and diversify across products, geography, and technologies.
An increasing number of entrepreneurs are now open to partnering with private equity funds to accelerate growth and strengthen governance and management.
Typically, they sell majority stakes while retaining a meaningful minority position. This ensures alignment of interests, continuity in leadership, and commitment from the selling shareholders, while allowing diversification of family wealth, continued involvement in the business, and a gradual path toward succession.
How do you manage leadership transitions when a founder steps back?
We usually agree on a gradual process. A new General Manager or incoming CEO will work alongside the founder for one or two years. The founder then assumes the role of Chairman, continuing to contribute through experience, relationships, and strategic vision, while the new CEO takes over day-to-day management and company leadership.
In Italy, the emotional bond between entrepreneurs and their companies is particularly strong, often described as akin to a “parent-child” relationship. For this reason, trust, cultural affinity, and frequent personal interaction are critical to supporting the entrepreneur through a successful transition.
Looking ahead, how do you balance resilience and growth?
We remain optimistic and growth-oriented. Macro risks are real, including high public debt and trade barriers; however, the Italian mid-market presents strong opportunities for private equity funds. Our approach is to remain proactive, pursuing growth and value creation decisively.
With careful selection, a solid strategy, disciplined execution and a focus on operational excellence, we are confident that resilience and growth can go hand in hand.
Raffaele will be speaking at the upcoming 0100 International conference in Milan, taking place October 27–29.
He will join the panel “Scaling Under Pressure — Rethinking Large Capital Buyouts in the Age of Higher Rates and Tighter Exits”, alongside:
Sharand Maharaj, Co-Managing Partner, MML Keystone at MML Capital Partners
Stefano Zavattaro, Partner and Head of Italy, CAPZA