Temasek has acquired a 9% strategic minority stake in the management company of FSI, the Italian growth equity investor with approximately $5.7bn under management. The move formalises a relationship dating back to 2018, when Temasek first invested in FSI’s funds. Since then, it has backed FSI I, which closed in 2019 and delivered eight exits across 11 portfolio companies, and FSI II, which closed in 2024 as Europe’s largest fund dedicated to a single country. Temasek is also an investor in Scale-up Capital Solutions, a fund FSI launched to target high-growth Italian SMEs.

For Temasek, which had a net portfolio value of $401bn as of 31 March, the stake extends a decade of investment in Italy. Its existing Italian exposure includes direct and indirect interests in Ermenegildo Zegna Group, Golden Goose, and Moncler. “Italy is an integral part of Temasek’s Europe strategy. Over more than a decade, we have built our portfolio and networks steadily, and stepped up the pace in recent years. Our partnership with FSI extends that into the mid-market,” said Nagi Hamiyeh, president of Temasek Global Investments.

The Italian mid-market is made up largely of founder- and family-owned businesses, many approaching a new phase of growth or succession. Such companies often need substantial equity and support with international expansion. Temasek plans to contribute its sector expertise and global networks, while FSI brings its local sourcing and relationships with Italian entrepreneurs. Hamiyeh also outlined how Temasek intends to engage with portfolio businesses: “We engage companies’ boards and management on strategy and governance, while leaving day-to-day operations to them, and can participate directly as they scale.”

Over its 15-year history, FSI has specialised in minority partnership positions, limited use of leverage, and transformational growth projects. According to the firm, this approach has produced average annual revenue growth of more than 20% across its portfolio, EBITDA expansion of around 25%, and a 20-percentage-point increase in international sales. FSI has invested in 25 Italian companies to date and completed more than 50 add-on acquisitions. “Italy is home to some of Europe’s most remarkable SMEs, and FSI has become the bridge through which the world’s leading institutional capital reaches them,” added Maurizio Tamagnini, chief executive and managing partner of FSI.

FSI’s investor base already includes the European Investment Fund, sovereign wealth funds from the Middle East, the Far East, and Central Asia, as well as Italian institutions, European banks and insurers, and family offices of industrial groups.