ELITE, our Group’s ecosystem for ambitious private companies, has come a long way since its launch in 2012. And recent growth has been particularly dramatic, with nearly three times as many ELITE companies today as there were at the start of 2017. So, might ELITE soon be ready to pause and retrench? On the contrary, say two senior insiders, this is only the beginning of the story.
A key factor in ELITE’s success is the way it has kept enhancing its support for participants. Today this stream of enhancements is stronger than ever. “We are broadening our offering and making it more consultative,” says Marta Testi, Head of Product Management and Italy Country Head. “Whereas ELITE was once primarily an 18- to 24-month training programme, it is now a complete solution and ecosystem that works with companies for the longer term.”
Marta points to the growth compass, a recent innovation which helps companies understand where they are on their journey so that they can be helped to achieve their potential. Umerah Akram, Head of Global Business Development and UK Country Head, highlights another development: the ELITE Basket Bond. This unique funding instrument was launched in 2017, with the first €120m basket enabling a group of ELITE companies to access debt capital.
“The basket bond initiative was launched in Italy and we are looking to recreate it in the UK and other parts of the world,” says Umerah. “By spreading the risk, the product facilitates access to investors and institutions that otherwise couldn’t invest directly in these companies.” This year has seen the launch, in association with Italy’s export credit agency, of a €500m basket bond facility supporting export-oriented ELITE companies.
Our funding initiatives were not only limited to debt capital as this year we have also launched the SPAC in CLOUD model, the result of a year-long collaboration between ELITE and Electa Ventures that offers a streamlined route to the public markets. The IT services and solutions company Digital Value became the first company to be successfully listed through SPAC in CLOUD and now we are working with other potential target to replicate the successful model in Italy and UK.”
Enter the multipliers
Backed by such innovations, ELITE has grown exponentially both in numbers and reach. And, in Europe at least, much of this growth has come from so-called ‘multiplier entities’ – banks or other large institutions that have growing companies in their value chain (whether as clients or suppliers).
Over the years, ELITE has worked with a number of corporate banks and created dedicated groups of associated companies. This model, known as the lounge model, helps scale the ELITE community while also enabling the banks to build better relationships with their clients.
This year ELITE has entered into various different lounge models, providing even more ideas for the future. One of these is the ELITE Scotland lounge, where the team is working with Scottish Enterprise to increase the already healthy number of Scottish companies on ELITE. There are opportunities to replicate this in other parts of the UK, and the team is also working on such models with authorities in several Italian regions.
ELITE’s latest partnership is with Leonardo, the listed Italian aerospace, security and defence giant. This is focused on working with Leonardo’s SME suppliers who need long-term support in building their businesses. Leonardo is actively encouraging its suppliers to join ELITE and is contributing to ELITE workshops that will give the companies better insights into its requirements.
There is much more to come, says Umerah. “We’re having conversations with other potential multiplier entities in the UK and elsewhere in Europe. Having these case studies gives us a springboard for even more opportunities.”
Growth and engagement
As well as growing in the territories where it began, ELITE is also scaling far more widely. Outside Europe, the team is already present in the Middle East, Latin America, the US and Africa (now home to more than 100 ELITE companies). It is also exploring possibilities in China and India, in line with Group priorities. “We’re looking to build local ELITE communities in each region,” says Umerah, “while also upholding a global standard.”
The potential is extraordinary: in time, Marta and Umerah foresee ELITE including tens of thousands of companies. But as Marta points out, it isn’t only numbers that matter. “However many companies we add, they still need to be engaged.” The vision is for ELITE to become a true global ‘platform business’ that brings companies, advisers, investors and business leaders together to interact with, and create value for, each other.
Delivery will depend, as so often, on collaboration – in this case particularly within our Capital Markets division. To date, more than 100 ELITE companies have accessed our London and Milan markets, raising over €3bn, and we continue to build on this. But with companies staying private for longer, and ELITE companies very active in undertaking private transactions, we as a Group must consider how to take our expertise in running public markets to the private space.
There is also collaboration at a more basic level. “Across the Group,” says Marta, speaking for the whole team, “people work with companies that could benefit from the ELITE offering. Connecting these companies with us, wherever they are based, provides a great example of collaboration in action – which, after all, is what ELITE is all about.”