The Lead Capital fund (Fundo de Capital de Risco para Investidores Qualificados) has held an initial close on €20 million ($25 million).
The fund, which was set up in June 2004 by Portuguese bank Banco de Investimento Global (BIG), will have an Iberian scope with a primary focus on Portuguese companies. The fund hopes to achieve its final target of €50 million by December 2004.
Investors in BIG’s inaugural private equity fund include a broad range of institutional investors, including a number of Portuguese financial groups, pension funds and insurance companies.
The next subscription period will see the fund being opened up to a number of selected international private equity investors, including international funds of funds.
The fund will target buyout opportunities in Portuguese family-run businesses with leadership positions in their respective markets that are open to accepting a financial investor into the shareholder structure, or those companies created by entrepreneurs who wish to move on.
Commenting on the initial close, Mario Bolota, chief executive officer of the fund and managing director of BIG, said: “Lead Capital seeks to fill a gap in the Portuguese private equity market by offering an alternative source of capital for entrepreneurs seeking growth, professionalism and expanded opportunities via the entry of institutional investors into the share capital of their companies.”
The fund will be managed by a newly created company, BIG Capital, in which management and employees hold a 20 percent stake. 34-year-old Bolota heads up the three-strong investment team, which also includes Andre Ribeiro Reis and Andre Aleluia.
Lead Capital's initial fund close comes at a time of increased interest in the hitherto stagnant Portuguese private equity market. Favourable market conditions and a recent relaxation of the tax/regulatory environment has led to increased activity in the fund-raising marketplace.
Last month SES Iberian Fund I, a cross-border Iberian-French private equity fund with a target of €50 million, was launched by Portuguese private equity firm Espirito Santo Capital and Sigefi Private Equity, the management company of French-based Siparex Group.
In April, Explorer Investments, a Lisbon-based private equity firm, held an initial close of its debut Explorer I fund on €50 million – surpassing its interim target of €40 million. The firm aims to hold a final close on €75 million by November this year.
Portugal is currently one of Europe’s least developed private equity markets, where funds represent only 0.09 percent of gross domestic product (GDP), compared with a European high of 0.65 percent in the UK and a European average of 0.25 percent.