Agnelli: the Italian 'royal family' extends its tentacles to increase its fortune

Visit of John Elkann to the largest Fiat plant, Mirafiori.CampoNicol / LaPresse / ContactPhoto "

The Agnelli are used to being in the highest places of all kinds of economic classifications, despite the fact that one of their most emblematic brands, Ferrari, has not recently done so on the Formula 1 circuits. The dynasty of the founders of Fiat is a one of the richest and most famous in Italy and, in addition, it ranks fourth among the 750 largest business families in the world, according to the latest list of the Family Capital publication. They are also among the 10 richest lines in world football. They have owned Juventus Turin since 1923, making them the longest-running sporting dynasty in Italy. Andrea Agnelli, with a net worth of more than 11,000 million euros, chairs the club, which has a market value of close to 1.000 million and is a promoter of the failed Super League that this week unleashed the war in European football.

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• The Agnellis expand their empire of luxury and invest in Louboutin, the red-soled stilettos

The Agnelli empire began to rise in 1899 with the extraordinary strategic vision and commitment to technological innovation of Giovanni Agnelli senior, founder of Fiat, on which the great myths of modern Italy were built and who played a key role in its evolution. of Italian capitalism, in addition to turning Turin into the industrial epicenter of the country. You have now lost weight. But after decades of international development, major decentralization, the acquisition of Chrysler to avoid bankruptcy, the merger of the resulting group with the French PSA that gave rise to Stellantis, the world's fourth largest automobile group, and others. vicissitudes, the colossus is constantly expanding and looking for new investments.

The family group is lately pointing towards the world of luxury. Last March it acquired 24% of Christian Louboutin, the French manufacturer of the famous red-soled shoes. With an investment of 541 million euros, the Agnellis will appoint two of the seven members of the council. Shortly before, they had announced an investment of 80 million in the Chinese luxury company Shang Xia, controlled until now by Hermès, through a capital increase that will make the family a majority shareholder. Shang Xia is known for combining traditional Chinese crafts with luxury.

John Elkann, the chairman of Exor, the Dutch-based family investment company, has explained to shareholders his intention to exploit his experience as Ferrari owners to build luxury brands. And he highlighted the solid financial results and resilience of this sector, which has remained strong even in the year of the pandemic and which is experiencing robust growth, especially in China. "Chinese consumers already account for a third of luxury spending and this percentage is expected to increase to at least half of the total, with a Chinese market reaching 95,000 million euros in 2025," says Elkann in the letter sent to the Exor shareholders. And continues:“We believe that both our experience in luxury and our long-term horizon make us the ideal partner to help Shang Xia grow into a great company. By doing so, we will build a 21st century company that can complement and strengthen the companies we own today, most of which were founded between the 19th and 20th centuries. "

The analyst Bernardo Bertoldi, professor at the University of Turin and specialized in family businesses, highlights that the way of investing is changing in this stage marked by an excess of global liquidity and at a time when the capital invested by large business families you can have a competitive advantage. “The investment sector is now more competitive than ever. Venture capital funds have enormous sums to invest, financial markets come from years of good results and are reaping a large part of the liquidity produced by expansionary monetary policies, ”says the expert. And he adds: “Those looking for an investor value more the capital that comes from those who have a strong business profile.We are also seeing more and more cases of large investment funds that are associated with entrepreneurs for their operations ”.

Bertoldi explains that Exor has established a structure with three main types of investments: majority, in which the company leads with a business vision;

financials, in minority stakes in listed companies, and seed capital investments in promising companies.

In recent months they have entered the capital of Louboutin and Shang Xia

Along these lines, the Agnellis launched Exor Seeds in 2017, the company through which they invest in startups in the initial and advanced stages. Since then, they have bet 250 million dollars in 42 companies around the world, of which about half are in the United States, a third in Europe, the Middle East and Africa, and the rest in Asia-Pacific and Latin America. Through this investment arm of Exor, the family has also entered the Italian real estate fintech Casavo a few weeks ago, which had promoted a financing round of 200 million, the fifth since its birth in 2017. This emerging company has growth plans in the markets of Italy and Spain and other European cities.

The Agnellis are also involved in various media outlets, including the financial daily The Economist and the Italian publishing group GEDI, which controls the national newspapers La Stampa and La Reppublica, among others. In addition, they control the entire reinsurance company PartnerRe and are majority shareholders of Ferrari, with 23% of the company; of Stellantis, with 14.4%; CNH Industrial, the manufacturer of agricultural equipment, trucks, buses and commercial vehicles, with 27% of the economic rights, and Juventus, with 64%. “Its strategy has been based on maintaining a strong presence in the automotive sector and at the same time, as all the great international families have done, diversifying its assets. They have bet mainly on the insurance sector, which is a good investment,with a good risk-return profile; for the publishing industry and luxury, which should be the most resilient sector ”, assesses Guido Corbetta, professor of Entrepreneurship and Family Business at Bocconi University in Milan.

New generations

In Italy the Agnelli are known as the uncrowned kings of the Republic, indisputable protagonists of the social chronicle of the transalpine country, although especially in the time of the charismatic Gianni Agnelli, l'Avvocato, who died in 2003 and grandfather of the new generations who now hold the reins of business.

Family conflicts between cousins ​​and parents and children, their confrontations over the huge inheritance or the outbursts of some prominent members of the clan occupy as much space in public opinion as their exploits or economic incidents.

The younger generation is now represented by John Elkann, 45, heir to his grandfather Gianni Agnelli and current helmsman of the family group, who has managed to multiply the financial performance of the conglomerate by almost 10 since he took command in 2003 and who Among other things, he signed the star signing of Sergio Marchionne, the man who saved Fiat. “They are a very large family, but they are capable of making important decisions very quickly. They have a structure in which there is a clear leader, the rest identify with him and remain united around this person ”, says Corbetta, who highlights his links with other powerful international families. The power of blood.