Private Equity in Italian Infrastructure: An Empirical Analysis of F2i’s Investment in Iren Acqua

Infrastructure is the backbone of modern economies, from water systems, electricity grids, digital communication, and transportation networks. These "hard assets" are essential to the private sector's productivity, economic expansion, and social well-being. Historically, the public sector has been responsible for infrastructure provision and financing, which is funded through general taxation and sovereign debt. However, over the last several decades, a noteworthy discrepancy has emerged: public investment in development and maintenance has continuously lagged behind demand, especially in advanced economies, despite its critical relevance. Many governments are unable to close this widening "funding gap" due to an intersection of political short-termism, competing budgetary priorities as healthcare and pensions, and high levels of public debt. This shortfall is characterized by operational inefficiencies, inadequate asset management, and a failure to apply commercial discipline to what are basically large-scale, long-term businesses. It is not only a quantitative issue of insufficient capital. Within the context of public sector retreat and performance failure a new actor has risen as major player: private capital, and more specifically, the Private Equity (PE) model. Along with financial resources, they also contribute with operational knowledge, governance discipline, and a value creation-focused approach. This thesis investigates this paradigm shift, examining the nature, mechanisms, and implications of private equity's growing role in financing Italy's essential infrastructure, with a specific focus on the investment by F2i SGR in Iren Acqua.