Investment Fund

Today we are opening a new Labor-b column that aims at giving companies a voice by meeting Gianfranco Piras, partner of XENON Private Equity.

Hello Dr. Piras, Can you introduce yourself?

My name is Gianfranco Piras and I am a partner in an investment fund called XENON Private Equity, an asset management company, authorized under Luxembourg law to operate throughout Europe. We manage closed-end funds and we currently have 3 funds under our management.


Can you tell us what Xenon is and what prospects it has for the Italian market?

Xenon is an active fund whose first investment is in Italian companies, which can subsequently invest in companies abroad. Our target audience are medium-sized companies, the most significant industrial elements in the Italian scenario. With reference to our prospects for the Italian market, we are convinced that once this moment of crisis which has hit all sectors across the board, will be over, the economy will restart with an important boost. We are optimistic and aware that ours is a thriving market.


What are the valuable assets that Xenon finds today in Italian companies?

Xenon looks for companies whose main feature is a great propensity towards export, symbol of Italian excellence that belong to niche markets. What has always denoted Italian companies is the flexibility and adaptability of the people who make it. Mostly, we invest in companies that were born and grown from the idea of ​​an entrepreneur that has proven to be a winning one.


What are the main critical issues to be addressed both in the due diligence phase and downstream of the acquisition?

We have always performed financial, legal and tax due diligence that allowed us to know the numbers perfectly and we have only recently introduced Labor B’s HR Due Diligence and realized how significant it was.

To date, our evaluation is both an economic evaluation but above all an evaluation of the people who make up the company we’re looking to acquire. As a matter of fact, the companies in our target market are mainly made of people, so balance, organization and a whole series of “soft skill” aspects are essential to consider.

Great attention is paid to framing and knowing the structure of the company, because once the acquisition is completed we will further structure the organization and this makes it essential to understand where to start.

Surely this is the most complex aspect.


Why did Xenon decide to include HR Due Diligence in the analysis processes? With what objectives?

Historically, it has often happened to have entered companies neglecting some structural and organizational aspects which then revealed themselves in a problematic way later on, as all issues tend to surface sooner or later.

We realized that we mainly acquire people, same warehouse, same machines but with different people they may not work.

Our goal is therefore to have a framework on regulatory compliance in terms of employment relationships and staff remuneration policy, a quantification of the risk deriving from any non-compliance, highlight critical issues in the area of ​​organization and internal balance and have evidence of investments of the work plan necessary to remedy any of them.

HR Due Diligence does not push us to invest in a particular company but allows us to say no to an investment, because it shows some critical issues that could be a significant risk of loss greater than the advantage of investing in the company itself.


Were your expectations met?

We work in a very competitive world, no different than a skiing race, the scenario might change, but in equal measure we must show that we are always ahead of others, reaching the goal in the shortest possible time. Labor B with the HR due diligence service allowed us to take a picture of the organization under analysis, making the nuances sharper.

We are aware that we are a demanding customer and it is not easy to satisfy our needs, but Labor-B has done a great job and to date HR due diligence has proven to be a significant process in the evaluation of a company before an acquisition.

Dr. Piras, thank you for the time you have dedicated to us and for your testimony.