Local Banks and Private Equity: Cultural and Organizational Challenges in Light of the International Financial Crisis

Abstract

This paper describes some of the changes that have been brought about in the Italian private equity market by the global financial crisis, by undertaking a contextual analysis of the characteristics of supply and demand in the private equity sector. On the demand side, we attempt to describe the major effects of the financial crisis in terms of the trends, size, and profitability of the companies investigated. On the supply side, we attempt to verify in the light of the global financial crisis whether the category of intermediary bank represented by local banks has changed its modus operandi in order to gain the characteristics of a diversified intermediary in the merchant banking business sector. We have here tried to trace the evolution of the role of the bank in dealing with private equity. In particular, we describe and empirically analyse the role of local banks in providing support for nationwide companies.

Keywords: Regional Innovation System, Technology Districts, Financial Crisis, Private Equity, Merchant Banking, Local Banks

JEL Classification: M1