An important new player in the European private equity market is set to emerge after Banca Intesa incorporates Banca Commerciale Italiana (BCI) to form Italy's largest banking group. Details about the structure of the investment banking organisation of the new bank will not be revealed for another six weeks. But it will certainly include a new private equity division which has plans to launch a European investment fund with a target of up to &euro300m ($277m).

Paolo Grandi, who is currently head of merchant banking at the Banca Intesa subsidiary Mediocredito Lombardo, argues that it is the single currency which has been the biggest influence on the strategy of the new division. He says: 'Europe is becoming a single market for private equity. There will be a specialisation and segmentation for each different country but it is no longer possible just to operate domestically if you want to become an important player, as we do.'