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Increase in Interest towards Spanish Private Equity – November 2014

by Lauren Mason

  • 20 Nov 2014
  • PE

With the economy showing signs of improvement and the threat of another debt crisis having subsided, private equity activity within Spain has shown resilience, and is starting to demonstrate strong progress towards further growth. Preqin’s Investor Intelligence currently tracks 5,428 LPs, of which 353 firms have previously invested in Spain-focused private equity funds. 

Over the past two quarters, multiple Spain-focused buyout funds have held an interim close, with a diverse range of LPs committing capital. For example, Caja Rural Particulares committed to Espiga Equity Fund, which recently held a first close on €105mn. The buyout fund seeks to invest in lower mid-market companies in Spain, and plans to make eight to 12 buyout and development capital investments. Another example is Elo Mutual Pension Insurance Company, which committed to Portobello Capital Fund III. The buyout fund recently held a final close on €375mn, and plans to make investments in growing, mid-market Spain-based companies with a diversified industry focus. Additionally, Reig Capital Group committed to Miura Fund II, which recently held a final close on €200mn. The buyout fund will invest in small and medium enterprises in Spain and Portugal.

There are a wide variety of firm types which have previously invested in Spain-focused funds. The most prominent firm type is fund of funds managers, which account for 26% of LPs. This is followed closely by pension funds at 25% (11% private sector pension funds and 14% public pension funds respectively), insurance companies at 12%, banks at 8% and foundations at 7% of LPs. This is a diverse range of investor types, covering a wide spectrum of firms with differing portfolios, strategies and risk spectrums, showing the breadth of LP interest towards Spanish private equity. 

Of the 54 Spain-based investors Preqin tracks that have an appetite for private equity, 12 (22%) are looking to make new commitments to the asset class over the next 12 months, indicating that private equity remains an important investment strategy for Spain-based investors. With the increase in private equity activity in Spain, combined with a corresponding increase in investor appetite, it is clear that Spanish private equity has the necessary opportunities to continue into the future.

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