KPMG's prospective report on private equity in Spain, based on a survey completed by 129 executives from 113 private equity firms, shows signs of optimism, reinforced by the good results obtained in 2014.
Venture Capital
In 2014, Spain has already seen signs of a reactivation of private equity, thanks to the improvement in the macroeconomic situation, the great role played by Fond-ico global, the strong interest among foreign investors in Spain, the entry into force of the new Venture Capital Law and the healthier position of banks, which have begun to provide liquidity to the system.
The majority of respondents anticipate an increase in investment activity in 2015 in terms of both number of transactions and volume (88.7% and 85.5%, respectively), and the report indicates that Private Equity can become the perfect financial partner by adding value to business management.
Looking to the future, just over half of the managers interviewed consider that the main challenge facing the sector is the identification of investment opportunities:
"To close an investment requires generating and analysing 80-100 opportunities and making a great effort in terms of both financial and time resources. Despite this, you often don't find opportunities that suit your preferences. Gradually, tools are coming onto the market such as Logic-fin, that help investors to identify and analyse investment opportunities by generating their own unique opportunities" says Diego Gutierrez of Abra-Invest.
With regard to the destination of investments, 62.5% say that the family business will be their main objective in the coming year.
In terms of divestments, around 90% of the managers surveyed expect to see an increase in activity in 2015 in terms of both number of transactions and volume. Sales to industrial investors and other private equity entities (secondary buyouts) will be the most common divestment mechanisms in 2015, according to 54.8% and 38.7% of respondents, respectively.
Venture capital has grown in Spain in recent years, from the incubation and acceleration phases of companies to their international expansion.
The two reasons for this positive cycle are expectations of a change in the general economic climate and the contribution of the public fund of funds Fond-ICO Global. On the other hand, family offices are the main provider of funds to Venture Capital entities, according to 47.1% of respondents.
The main challenge for professionals in 2015 is to put divestment of investees before identifying new investment opportunities in companies.
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