Private equity and venture capital investment in Spain hits record high

Private equity and venture capital investment in Spain hit a record high of €8.5 billion in the last financial year, according to Spanish venture capital and private equity association ASCRI (Asociación Española de Capital, Crecimiento e Inversión).

Posted Sunday, January 26th 2020
Private equity and venture capital investment in Spain hits record high

Miguel Zurita

Data from the association shows that, in 2019, there were more than 680 private equity and venture capital transactions in Spain.

International funds accounted for 80.7 per cent of the total investment volume, after making at total of 115 investments. Private national investors closed a total of 475 investments, while public national investors closed 90 investments, ASCRI said.

The middle market recorded a historic high, with investment of €1.9 billion across 69 transactions.

A total of 84 per cent of the investments involved an equity contribution of less than €5 million. Meanwhile, there were 18 megadeals (transactions of over €100 million), according to ASCRI, with a total value of €5.8 billion (or 68.4 per cent of the total value).

Buyouts accounted for €3.4 billion of the investment (across 71 deals), while in the growth capital investment sector, 77 deals were completed for a total value of €750 million.

Venture capital funds made investments with a total value of €737 million across 517 transactions in 2019, of which 79 deals were closed by international venture capital funds, 362 by national venture capital funds, and the remaining 76 by public funds.

The sectors that recorded the highest volume of investments were energy and natural resources (21 per cent) and consumer products (12.7 per cent). In terms of the number of deals, the most important sectors were IT (293 investments), consumer products (68) and healthcare (60).

Meanwhile, funds raised by national private capital firms totaled €1.8 billion, which ASCRI said, highlighted the “increased interest shown by institutional investors in the Spanish private capital sector”.

ASCRI estimated the 2019 divestment volume to be in the region of €2.3 billion after the closing of 258 transactions – 46 per cent of the total volume was divested through “sale to another private equity entity”, 14 per cent through “stock repurchase” and 12.5 per cent via “sale in the stock market”.

ASCRI president Miguel Zurita, who is managing partner of Altamar Capital Partners, said: “It is the first time that Spain has recorded results within the European average in terms of annual investment relative to GDP. Even though the majority of investments have been made by international managers that see the great growth potential of Spanish companies, the maturity of the middle market sector is worth noting, where the lead positions are taken by local managers and a dynamic venture capital ecosystem that is amongst the most important in Europe”.

ASCRI’s membership includes 130 national and international firms in the venture capital & private equity sectors, 80 service providers and 20 institutional investors.