Daniel Buaron says First Atlantic, founded in 1998 and now 70% owned by Italy's diversified De Agostini group, has $4.3 billion under management in 130-plus assets, of which $3.6 billion in Italian SGR closed funds and another $764.8 million managed for third parties. One primary client has been Whitehall Funds, the real estate arm of Goldman Sachs, but its fund is currently in a liquidation phase. First Atlantic Real Estate began raising its own funds in 2006.

To supplement the equity, leverage is available post-crisis. Italian banks are lending up to LTV of around 60% but it remains difficult to move above that. "Our approach is really to add value and we are very hands-on," says Buaron. "With Whitehall we advised them in several situations to refurbish assets before selling." In one well-timed move, it persuaded Whitehall in July 2007 to accept around $1.3 billion for a portfolio, even though it was reluctant to do so. "I couldn't forecast the global crisis but I could see that the price we were being offered was fantastic," he says. "While most of the others were caught in the crisis, we have not had any default on funds or assets that we manage."

How does Buaron assess the Italian market at present? "In Italy we didn't have the big drop in values that occurred in some other countries. There was an increase in cap rates, and it is still there. But there is a huge difference between prime and semi-prime. Prime goes at 5% or less but there are very, very few of these kind of assets. The big issue in Italy is that in the centres of towns like Rome or Milan you don't find anything genuinely A-quality. In Milan I know maybe 15 buildings that are prime tenant, A-quality, long-term lease so that when one comes for sale you can get fantastic levels of cap rates. In fact, this is exactly our game: to buy something that is not really A-quality and transform it by refurbishment and capex, eventually selling to long-term investors. For property not A-Grade you go to maybe 6-1/2% in cap rates, and even 7-1/2% in some cases."