VENTURE CAPITAL: ITS ROLE IN INVESTOR PORTFOLIOS

For private markets in Italy these are times of turbulent change. For many investors, allocating shares to private markets is no longer a residual choice, but has in fact become a pillar of their strategy. The shift has been aided by the 2015 changes to regulatory constraints on investments and by the huge capital flows from the Recovery Fund and the Horizon Europe programme, which are generating notable innovation in the Italian economy.
What these markets are appreciated for is their potential ability to achieve on average higher returns than those offered by public markets – as a result of a higher level of risk -, and their decorrelation from these markets: this means that asset prices are less volatile, less sensitive to sentiment and more closely linked to corporate fundamentals. On the other hand, these are illiquid markets which, in fact, are characterised by a low volume of trading.

HELPING UNLISTED COMPANIES GROW

Kairos has therefore decided to expand its offering in the illiquid investment segment with the introduction of Kairos Ventures ESG One. This is a reserved closed-end fund under Italian law that invests in innovative start-ups and SMEs in early and late stages.
Our goal in creating this type of product is to raise capital from investors and to employ it in unlisted companies with high development potential. Innovation is indeed an indispensable driver for the growth of industrial countries because it allows them to stay competitive and stimulates new investment and new consumption.
Kairos Ventures ESG One supports entrepreneurs committed to growing and consolidating their companies. The Fund concentrates on four areas:

THE FUND’S APPROACH TO ESG

Kairos Ventures ESG One is one of the first venture capital funds on the Italian market to promote the principles of sustainability. This is also what makes it a distinctive product in the illiquid investment landscape.

Kairos integrates ESG criteria into its investment process and is committed to monitoring risks and safeguarding sustainability opportunities, in line with the company strategy and philosophy it applies throughout the investment and divestment processes. Further information on sustainability aspects is available in the section “Sustainability-related disclosures” and in the prospectus.

Among other things, the Fund also promotes environmental and social characteristics – provided that the investee companies comply with good governance practices – with partial use being made of sustainable investments. This product is categorised as SFDR Article 8.

THE UNIQUENESS OF THE KAIROS OFFER

Kairos Ventures ESG One is mainly focused on Italy and can thus grasp the opportunities offered by the country’s current climate of development and growth. The product’s funding target is €100 million: this will make it one of the largest venture capital funds in Italy and will consequently allow for risk dilution, with investment in around 40 companies.
Kairos Ventures ESG One is aimed at professional investors (by right and on demand) and also at non-professionals with a subscription of no less than €500,000. Investing in the Fund is suitable for experienced investors with a long-term investment horizon, for whom this investment is not the only investment program and who are able to fully understand the characteristics of the Fund, the investment strategies adopted by the company and the associated risks. Finally, individuals and legal persons can benefit from the 30% tax incentive of the invested amount
Finally, venture capital funds are a way of diversifying the asset allocation of an investment portfolio because they are decorrelated to market trends.

The Fund’s return may vary significantly from year to year depending on the performance of the single assets in which the Fund’s assets are invested. The partial or total loss of the invested capital in the Fund is inherent in this type of investment, so investors must be aware of this eventuality. Past performance does not predict future returns. The Kairos Ventures ESG One summary risk indicator is 6 out of 7.

THE MANAGEMENT TEAM

Incisive knowledge of the Italian market and tech start-ups, coupled with an extensive network of relationships gradually and consistently built up with an array of outside advisors and technology experts, make the Kairos venture capital team a group of professionals offering unmatched support to entrepreneurs as they grow, guiding them to their goal of stock exchange listing and the performance of M&A operations.