The U.S. International Development Finance Corporation ("DFC") is an agency within the executive branch of the U.S. Government. It was created in 2018 during the first Trump Administration to provide debt financing for private, for-profit ventures in developing nations. The DFC’s charter was later amended to allow the agency to make equity investments in private sector ventures, and to invest in other equity funds. Its mandate is to select ventures that (i) advance US interests, (ii) foster economic development in developing nations, and (iii) deliver a positive return to US taxpayers.

Currently, Italy is classified as a “High Income” country. As a result, entrepreneurs, companies, private equity funds and venture capital funds based in Italy are ineligible for investments from the DFC. This restriction generally applies to all EU member countries. On a very limited basis, the DFC is allowed to consider opportunities in “High Income” countries, but only if the proposed deal is in the energy or infrastructure sectors. 

When the DFC was created in 2018, its original charter was for a period of 7 years. Its current authorization expires on October 6th, 2025. The Trump Administration is now working with Congress to have the DFC reauthorized. Negotiations have been on-going since February 2025. Although the final terms of the reauthorization have not been finalized, it is widely known that the White House is in favor of broadening the scope and breadth of the DFC’s investment authority. Here are some examples of the modifications that are being advanced by the Trump Administration:

• Increasing the allocation of investment capital from $60 billion to $120 billion, and possibly up to $250 billion

• Increasing maximum equity stake in a single deal from 30% to 49%

• Removing all country restrictions, except sanctioned nations (ex: Iran, Russia)

• Increase Congressional notification threshold from $10 million to $100 million

• Increase staffing and allow for market-competitive pay structures

While none of these changes are guaranteed, the common sentiment in Washington, D.C. is that the DFC will have a much broader investment mandate and be allowed to participate in deals that are domiciled in High Income countries such as Italy. Deals based in Italy would be well-positioned to receive investment capital from the DFC:

• Strong geopolitical alignment with the US and the Trump Administration

• Economic compatibility and strong cultural ties

• Italian valuation arbitrage and DFC investment thresholds

Siena Lane Partners has assembled a working group that is creating a fund-model that is based on a “global parity” thesis.  The team of lawyers and accountants from the US, Italy, Switzerland and Luxembourg were tasked with structuring a model fund that will allow an Italian sponsor (i.e. VC or PE) to raise its next fund on equal footing with any US or EU-based fund. This model removes the excessive tax and regulatory burdens that have hampered Italy’s premiere firms from attracting major institutional investors from other countries such as the US, UK, and Saudi Arabia.  

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