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The Growing Value of Spanish Private Equity – May 2016

by Ayush Varma

  • 09 May 2016
  • PE
  • VC

Since July 2013, Spain’s economy has grown for 13 consecutive quarters and is forecasted to continue this growth throughout 2016. The economic growth of the eurozone’s fifth largest economy seems to have buoyed its private equity industry in recent years, as Spain-focused funds raised an aggregate €1.3bn across seven vehicles in 2015, a 148% increase from 2014. According to Preqin’s Private Equity Online there are currently 131 active private equity firms located in Spain, which have raised an aggregate €13.1bn over the past decade. While the UK remains the largest private equity market in Europe, with UK-based firms raising €314bn over the past 10 years, Spain ranks ahead of both Italy (€12.6bn) and Portugal (€3.8bn) in terms of capital raised.

Madrid continues to be at the forefront of private equity in Spain; the city houses 47% (61) of Spain-based private equity firms, the largest of which is Altamar Private Equity, which has raised €1.8bn in capital over the past 10 years. The Madrid-based private equity fund of funds manager is currently in the process of raising its eighth flagship vehicle, Altamar VIII Private Equity Program; like its predecessors, the fund seeks to invest in funds managed by established GPs with experience in managing buyout funds. Outside Madrid, Barcelona is Spain’s other major private equity hub, accounting for just over a quarter (34) of firms. Miura Private Equity is the largest Barcelona-based fund manager, having raised €300mn over the past 10 years.

While venture capital is the most common strategy of Spain-focused funds closed since 2006, 2015 saw three venture capital and three buyout funds close. An increase in larger buyout funds entering the Spanish market could be behind the higher amount of capital raised in 2015; buyout funds in 2015 secured an average of €248mn, compared with the average venture capital fund size of €19mn. Venture capital strategies are the most prevalent among Spain-based GPs, with 55% indicating a preference for early stage investments, compared with 30% looking to invest in buyout vehicles.

With 15 Spain-focused funds in market targeting €1.9bn, and Caixa Capital Risc’s Caixa Innvierte Start Fund already closed this year, 2016 looks as though it could be another positive year for the Spanish private equity market.

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