Serial entrepreneur Luke Johnson on why he took a punt on a business in Italy, the poor morale in the M&A community, and why we need a better stock market for small companies.

By inclination, I am a contrarian investor and so I recently backed a mini-conglomerate with various assets in Italy - not a place which is exactly flavour of the month. The business owns a hotel, a water park and restaurants, among other assets, and appears good value on certain measures. Time will tell if I am clever or a fool.

It is easy to be bearish about Italy. Its economy has been stagnant for years, its banks are weak, its demographics are worrying, it has a reputation for poor governance, the state has enormous debts and the national mood is very gloomy. However, Italy also has huge strengths. Households are actually far more solvent than British ones. In areas such as design, fashion, food and drink, and manufacturing it has many outstanding companies. From Ducati to Ferrari, from Tod's to Prada, from Luxottica to Barilla, Italians are world-class exporters and brilliant engineers. Like much of Europe, it suffers from being locked into the euro at the wrong exchange rate - but that may change.

Meanwhile, the industrial base is highly fragmented - it has far more smaller, family-owned firms than almost any other comparable country.