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Private Equity Funds in Market Targeting the Iberian Peninsula – February 2014

by Kamarl Simpson

  • 25 Feb 2014
  • PE

Following signs of economic growth in Spain, there has been a resurgence of interest for private equity investments in the country. US-headquartered buyout shop Kohlberg Kravis Roberts is among the numerous private equity players attracted to the Spanish market, having recently opened its first office in Madrid. 

Preqin’s Funds in Market database shows there are 40 private equity funds currently raising capital that focus on opportunities in the Iberian Peninsula. This includes funds that consider this region as their sole focus, and those that invest here as part of a wider European scope. Collectively, these funds are targeting nearly €13bn in capital commitments, with an average target size of €355mn. Further analysis reveals 24 of these vehicles focus on investing solely in Portugal and/or Spain, aiming to raise an aggregate of just under €3.5bn. Of these 24 vehicles, 11 have held at least one interim close, with aggregate capital commitments standing at €1.3bn. 

There is a diverse range of fund types currently seeking investor capital with a sole focus on the Iberian Peninsula. The largest amount of capital is being sought by distressed private equity funds, with four such vehicles in the market seeking an aggregate of €1.3bn. Vallis Construction Sector Consolidation Fund accounts for 80% of the capital sought for distressed investments in the region. The turnaround vehicle managed by Vallis Capital Partners, is aiming to raise €1bn for investment in the construction and public works industry in Portugal. There are also four buyout funds focused solely on the region targeting an aggregate €700mn, the largest of which is Portobello Capital Fund III. The fund managed by Portobello Capital, is targeting €300mn for investment in growing mid-market Spanish companies and has enlisted the services of placement agent Probitas Partners. Venture capital funds are the most common fund type focused on investing in Portugal and/or Spain, with 12 such vehicles are seeking just over €400mn. 

In 2013, a total of 10 private equity funds that invest either solely in the Iberian Peninsula or as part of a wider geographical focus held final closes, having secured a combined €4bn. Half of these funds have a sole focus on investing in the region and accounted for €160mn of the aggregate capital raised. Santangel Fund I was the largest fund that closed in 2013 focused solely on the region. The fund raised €100mn for growth investments primarily in Valencia-based companies looking to expand into foreign markets.

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