Home > News >
INTERNATIONAL PRIVATE EQUITY FUNDS INVESTED OVER €11,000 MILLION IN SPAIN BETWEEN 2005 AND 2011.
The contribution of International Private Equity Funds (IPEF, henceforth) in Spain is unquestionable, even though the investment activity of Domestic Funds (DPEF. henceforth) constitutes a base that should be remarked. €9.4 billion is the existing invested portfolio of 48 IPEF in Spain, representing nearly 46% of the total portfolio of Venture Capital & Private Equity (VC/PE) at the end of 2011. This huge amount is concentrated in 97 companies (5% of the total number of investees), with the average invested amounting to almost €100 million per company. This figure is far from almost the average found in DPEF.
Between 2000 and 2011, €30.2 billion were invested in Spain by VC/PE institutions, of which €12.9 billion (37%) came from IPEF and the remaining €17.3 billion (63%) were committed by DPEF. In the past twelve years the share of IPEF has increased substantially, especially from 2005, when three out of the five largest transactions carried out in our country (ONO, Amadeus and Cortefiel) were recorded.
Between 2000 and 2004 the share of investments carried out by IPEF was 24% (amounting to €1.8 billion), whereas between 2005 and 2011 their stake increased to 45% (€11.2 billion). The average amount invested the second period was 6.2 times higher. If we analyze separatelywhat has happened since the beginning of the financial crisis, the reluctance of foreign investors to invest in Spanish companies resulted in a decrease of the share of investments carried out by IPEF in Spain to just 23% and 21%, respectively. Conversely, in 2010 and 2011 the share rose to 68% and 60%, respectively. Last year the IPEF led the most important deals closed in Spain, with the larger ones being Capio, Mivisa, Abengoa and Swissport.
42 IPEF started their operations in Spain since 2005 (3 in 2007, 6 in 2005, 2006 and 2008 and 7 in 2009, 2010 and 2011). Most of them are Private Equity houses that focus, primarily, on leveraged buyouts and some sporadic Replacement or Turnaround transactions. Nevertheless, in recent years some specialized funds looking for promising technology companies in early (Venture Capital) or expansion stage have also started their investment activity in Spain. The average investment of this latter group did not reached the €10 million threshold and, in some cases, it did not even reach the one million threshold.
Nationalities?. Most funds are have their headquarters in the United Kingdom (18), the United States (16) and France (7), with also representation of other countries such as Belgium, Finland, Italy, Latin America, Luxembourg and Sweden.
Spanish companies, multinationals, large, medium or small are potential targets for IPEF again after 2009, but what has changed from the pre-crisis situation is that a large number of the new international players do not need to have physical presence to operate in our country. Currently, only one out of four investors has an office in Spain. Professional contacts are already so widespread that many of them can close a deal without having local people involved. But there are also intermediate situations where local managers have been hired by the IPEF without the creation of a local branch.
IPEF that currently have investee firms in Spain:
3i Europe, Advent International, Apax Partners, Atlas Venture, Atomico, Balderton, BC Partners, Blackstone, Bridgepoint, Candover (Arle Capital), Cinven, Coral Group, Crédit Agricole PE, CVC Capital Partners, Demeter Partners, DLJ South American Partners, Doughty Hanson, Elaia Partners, Ergon Capital, First Reserve, G Square, General Atlantic, Goldman Sachs, HG Capital, Highland Capital Partners, Hutton Collins, Index Ventures, Insight Venture Partners, Investindustrial, JP Morgan, JZ International, Kennet Partners, Kohlberg Kravis Roberts, L Capital Partners, Magenta Partners, Mangrove Venture Capital, Open Ocean, PAI Partners, Palamon Capital Partners, Permira Asesores, Providence Equity Partners, Quadrangle, Scope Capital Advisory, Sequoia Capital, Smart Ventures, The Carlyle Group and Thomas H. Lee Partners.
Marcos Salas de la Hera