Private Equity Funds in Market Targeting the Iberian Peninsula – August 2013

by Christopher Hardy

  • 21 Aug 2013
  • PE

As Preqin’s Funds in Market shows there are 31 private equity funds currently raising capital that focus on opportunities in the Iberian Peninsula, in the south-west of Europe. This includes funds that consider this region as their sole focus, and ones that invest here as part of a wider European scope. Collectively, these funds are targeting just under €10bn in capital commitments, with an average target size of €322mn. Seven of these Iberian Peninsula-focused funds are looking to secure more than this average.

Out of the 31 funds, 18 invest in Spain, rather than Portugal, as either their sole focus or as part of a wider focus. These vehicles have an aggregate target of €6bn and an average target size of €346mn. In comparison, the five funds that consider Portugal alone when investing in the Iberian Peninsula are much smaller, with a collective target of just over €1bn, and an average target size of €250mn. The remaining eight funds seek investments in both Spain and Portugal either solely or as part of a wider focus and have  an aggregate target worth approximately €3bn and an average target size of €316mn.

There are a diverse range of fund types currently raising capital with a focus on the Iberian Peninsula. Infrastructure funds make up the largest group with six funds currently in market. Buyout, early stage and venture capital (general) fund strategies each have four funds raising capital at present. The 18 funds focused on these four strategies have a combined target of just over €5bn with an average target size of €302mn.

The capital targeted by the top five funds in market equates to 66% of the €10bn total targeted. Interestingly, despite the well-publicised frailties in the current Spanish real estate market, two out of the top five funds invest in real estate opportunities, with a particular focus on Spain. The second largest fund in market focused on the Iberian Peninsula targets construction opportunities exclusively in Portugal and Spain. This fund, the Vallis Construction Sector Consolidation Fund, is a turnaround strategy vehicle and thus seeks to capitalise on the large number of struggling construction sector firms in Spain and Portugal. The largest fund in the dataset is the €3bn-targeting PAI Europe VI buyout fund. It is managed by PAI Partners, a French private equity firm that seeks to invest in a diverse range of industries throughout Europe, including the Iberian Peninsula.

The number of final closes in the past 12 months including funds with a particular focus on the Iberian Peninsula totals 14. These funds raised a combined total of €5bn with an average final size of €359mn. AXA Infrastructure Generation III was the largest of the 14 funds; the vehicle closed in March 2013, on €1,450mn, and seeks investments into infrastructure opportunities throughout Western Europe.

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