Chapeau's interview with Giovanni Tamburi: The Roman who bought the largest Italian companies

Today TIP's assets are over 3 billion. Great gurus of the time who said it was illegal to do these things. I don't care, I'm convinced there's a terrifying bubble. How much money do you want? 3.5 million. Boom, I sent the wire transfer and our, I believe, 14.5 million became at least 300.

I played with miniature cars and that was enough for me. In the early years of my life I wasn't very well, so for every injection there was a little model given as a gift, and in the end there was a nice collection.

My mother didn't do anything, in the sense that she was the mother of four children, which was already a good job. My father worked at FAO.

At 11, instead of going to the countryside or playing tennis, I sold cigarettes at the tobacconist's. Then later with some friends and my brother, we set up a small advertising agency, I was 17-18 years old. It was already billing. We had been quick to catch on to the fashion of those little paper cubes that were printed on the sides, something that didn't exist in Italy. We had seen them at a trade fair abroad and so we helped sell these cubes to companies that printed their logos on the sides. Then with another of my brothers I enjoyed buying and selling, fixing up mopeds. I started working during university at this consulting firm, I was sort of an assistant to the founder. During that period, for example, I worked a lot on tourism. He was one of the consultants of Valtura, at the time the top of Italian tourism, and so going around Italian villages and studying a strategy for how to evolve tourist villages was a very interesting school. One of the clients was a large construction company that asked me to go work for them permanently. A friend of my father knew about it, he had a large construction company, Cogefar, who told me 'You can't work for the competition, come to me.' From September 1, 1977, in Milan, something I had no desire to do because I was very well off in Rome, but they are people you can't say no to. And it was one of my great fortunes because from there, consulting was managed by a man who later became general manager of Bastoggi, a large financial company of the time, so I found myself working more for Bastoggi than for Cogefar, which was the beginning of this work in investment banking, merchant banking, and everything went well.

By chance, in the sense that I indirectly knew one of the founders of Euromobiliare who one day asked me if I knew anyone good in M&A at Bastoggi. I said, 'Look, there's no one.' After a few months they called me back and said 'Why don't you come yourself? We'll pay for courses for you in Italy or abroad on M&A because we need to set up this department.' And I started as a young assistant in M&A at Euromobiliare.

26. It was the great school of my life because with Guido Roberto Vitale and Alberto Milla we entered true merchant banking while at Bastoggi we sold one company a month to pay salaries. There was intermediation, asset management, a foot in insurance. We invented M&A for medium-sized companies in Italy in those years, in the 80s at Euromobiliare. I was a young M&A assistant, then I became general director in 10 years, and then at the end I decided to leave because the company was bought by Midland Bank, which in turn was bought by Hong Kong and Shanghai Bank, and I had no desire to be an officer of an Anglo-Chinese bank. I took a sabbatical year, a year writing books, teaching at university, because I've always been a bit against the New York, London, Milan finance that is closed, reserved, you can't say anything, you can't do anything. You do your job well if you spread it, not if you keep it to yourself and don't even tell your wife when you come home.

So, after becoming CEO of Euromobiliare at 36, in 1991 Giovanni decides to leave everything to dedicate himself to writing and teaching. But that same year he receives an unexpected call from the Italian government. After a few months I was proposed to join this privatization commission of the Ministry of the Treasury because in my last year at Euromobiliare I had been sent to England to Midland Bank, and there was also the privatization part during the Thatcher period, so I studied a lot what Thatcher was doing. One day I get a phone call from Professor Cappugi, who had been tasked by the minister to set up the privatization commission, but no one knew what these things were, and he remembered that at a dinner I had talked about this thing. He said, 'Listen, come here because no one knows what we're talking about, but the state debt is so monstrous that we need to try to save it by selling some jewels. Will you give us a hand?' I gladly accepted because what could be more beautiful than a sabbatical period going to help the Italian state. Most people said it was unconstitutional to privatize ENI because of oil, unconstitutional to privatize Enel because of electricity bills. Oh my god, giving families' electricity to private hands, we're crazy. I must say that with a certain stubbornness, I convinced almost everyone, we wrote the law, and the law started the privatizations of pieces of Liri, Eni, Enel.

There would be many anecdotes, especially of all the great gurus of the time who said it was unconstitutional, illegal to do these things. I believe the strong bet was to say 'I don't care about all these blessed mothers who think they know it all. Let's try to do good for the country and not for lawyers, notaries, bureaucrats.' The most beautiful anecdote was when Professor Cappugi realized there were all these resistances, he called Matelda Grassi, a lawyer, and myself, and said: 'Let's forget about all the others, the three of us take a room, write the draft of the law, bring it to Giuliano Amato and see if he supports it.' He supported it and essentially the commission was shown a finished work against the majority of them. So at 38, Giovanni is already CEO of one of the largest investment banks in Italy and has also written the law that starts the privatizations of colossi like Enel, okay those were different times, but if today for a thirty-year-old it's already a half-miracle to have a permanent job, how exactly does he do all this before turning 40? Well, a fundamental role is played by his three mentors.

The first mentor was Valerio Levi with consultancy during university in Rome. The second mentor was Nanni Fabris, general director of Cogefar and Bastoggi, in those 3 years I was there. The third mentor was Guido Roberto Vitale, with whom I was 10 years at Euromobiliare, already recognized as one of the great gurus of Italian finance.

One thing that stayed with me a lot from Nanni Fabris was the fact of simplification. In a period when they went to university to explain balance sheet analysis with 100,000 ratios, 27 ratios, etc., he maintained that to understand the really important things, three or four items were enough, and this was one of the most important lessons of my life. From Guido Roberto Vitale's point of view, I think combining work ethic, passion for intelligent business finance, because finance as pure finance interests me up to a point. We were never into derivatives, structured products, complicated operations.

I finish the sabbatical year. I had many clients knocking on the door saying 'Why don't you set up some M&A activity again?' Gardini, Carlo De Benedetti, Giulio Malgara, and I founded Tamburi Associati Finanza e Privatizzazioni srl. Alone, without even a secretary, we started giving some of these consultancies to some of the clients I had before who weren't happy with the Midlandized Euromobiliare. This reputation I had built on privatizations led to the mayor of Rome calling me to do privatizations in Rome, the mayor of Milan to do them in Milan, the mayor of Como to do them in Como, one council all green, another all red.

I always went to the companies, I never tried to wait for the client in Milan, in a place like this, and this was always appreciated, so my life was on the road. I did 50-60,000 km a year by car, going to companies, trying to listen to entrepreneurs, trying to understand what they might want in terms of strategy, generational transitions, capital alternatives. The business developed quite well, so after a short time Alessandra Gritti came to work, who later became my wife, and the current general manager of TIP, Claudio Berretti, was my student at Castellanza, he took the exam with me, I found him smart, I said 'Why don't we do the thesis?' He did the thesis before even discussing it, he was already working here.

It was the era when private equity funds were born in Italy. I realized that there could be a different role. First, not to be a fund that by definition must buy and sell. Second, that replaces by putting in its own tied administrator, but being its own financial director with the aim of controlling as if it didn't trust the entrepreneur. We conceived with Alessandra and Claudio Berretti this model of minority stake for development, long-term oriented. Those who want to sell can go to funds. Those who want to accelerate growth through M&A, investments, etc., could have us not as simple consultants but someone who by participating in the capital risked with him and even risked leaving him the trust of management but putting in money. Obviously not wanting to create a fund because I didn't want to do something that would imply reselling the company. Moreover, the TIP project was launched without wanting any bank, only families. There were about fifty families, we then listed the company on the stock exchange after 4 years, and at that moment the families doubled, becoming about 100.

We started with five, me and four others. The four were clients from the M&A part who had understood that this formula could work. Between me, Alessandra, and them, through word of mouth, it became 50 because it was a new project. It was 2000, so there was also the dotcom bubble which helped because everyone said 'Mamma, we want to invest in these innovative modern things.' Indeed, the initial cut was more to invest in that world than in the world of more traditional companies.

We suffered a few small losses, nothing transcendental. At that time, venture capital is a bit the matrix of statistics, no? You invest in 10 companies, if one goes well, you don't care about the other nine. That never fascinated us. We looked at each city one by one, trying to extract value from each one. The big leap was the first important investment in Interpump, 24 years ago. We created the first club deal to do this very large operation. What I had in mind was to remove from companies this excess of financial leverage, the mentality of 'take the money and run' of many private equity funds. Interpump was owned by a private equity fund at the time because the founder decided to sell the entire capital to this fund. The fund had then listed the company on the stock exchange and was left with a small piece. The ambition was to say, what if we take this small piece, maybe invest more money, take a true long-term perspective, and create with Interpump a very successful international model, removing that desire that frustrated the founder a lot: 'the better things go, the faster you have to sell on the stock exchange or in other ways.' And it worked. The club deal was created because we didn't have enough money, so having all the families behind us and not having the money, I made a few phone calls, I said: 'Gentlemen, could you help me?' And again, with six or seven families, not even many at the time, we immediately filled the gap. We grew four times in Interpump over the years, buying shares from families who sold when they thought they had earned enough. But by holding on, we later earned more than everyone else, except the founder who is still there. Just to give a number, we bought Interpump shares at about €3. In these 24 years, dividends have been distributed for much more than €3, and today the stock is worth 45, it even reached 60.

But things are simple, much more than people think. Mega due diligence is useful up to a point, mega contracts are useful up to a point. We trust the entrepreneur.

One day we create a contact with the CEO Franco Moscetti. The Holland family already had very strong control over the company. There are two ladies, a mother and a daughter, so we go to the palace to propose entering the capital. They looked at us at first with some suspicion because although already listed, they preferred to go their own way without partners who might influence family life. That ended there. Then later we thought it might be useful to tell the CEO, look, if one day you have a big acquisition, rather than going directly to the market to propose capital increases, we could guarantee a part of this capital increase so that you go to negotiate the acquisition with money in your pocket. And I wrote him a letter saying up to 100 million euros, if you want, they're ready here, just convince us with a good operation. After a few months he came back with a good acquisition in Australia. We had a new meeting with the Holland ladies. They liked the idea, also because they liked that we wanted to, quote, bet so much money on a new operation. And Franco Moscetti, who incidentally later became president of OVS, because the world is small, negotiated, brought home the operation, then the operation was proposed to the market in a capital increase open to all. In the end we put in less than the 100 million promised, and from that moment the desire to accelerate this development was born, so a whole series of other acquisitions around the world, of store networks, because being a large retailer, like OVS, you buy companies that have stores in their belly. Moscetti left, Enrico Vita arrived, the current CEO, and currently Amplifon has almost 11,000 stores in every corner of the world, so it became the absolute leader in hearing aid retail.

In this room, the relationship with Remo Ruffini was born, the great guru of Moncler. The accountant of Remo, whom we knew very well, both Alessandra and I, got in touch. He had already moved forward with Euraseo and Carlle, but the accountant in particular said he wanted to have a partner in the family, in the company at the top level, someone who could give him advice not on the company to be listed or developed, etc. We liked each other, and after 15 days he went for 140 million. Moreover, it was in his personal holding company, not even in Moncler, which wasn't even listed, saying then one day if you list on the stock exchange, you'll give us listed shares, but anyway we make a bet of trust on you. A meeting that was supposed to be an hour lasted 4 and a half hours, two phone calls in the following days, and handshakes.