Private Equity News & Analysis

European Capital opens in Spain(2)

European Capital, a listed affiliate of US group American Capital Strategies that invests in equity, senior and mezzanine debt, has opened its fourth office in Europe.

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European Capital, the European affiliate of listed US group American Capital Strategies, has opened a new office in Madrid and hired a prominent Spanish banker to lead the team.

The Madrid office will be the European Capital’s fourth in Europe – it already has established operations in London, Paris and Frankfurt – while its US affiliate has a further eight offices on the other side of the Atlantic.

Luis Felipe Castellanos has been recruited as managing director to run the new office. Castellanos, a Spanish national, was previously with BNP Paribas in Madrid, where he was managing director and head of leveraged finance for Spain and Portugal. During his time at the French bank, he also served as head of energy, commodities, export and project finance for Spain and Portugal and director of the project finance and utilities group.

European Capital, which raised €125 million ($171 million) through a listing in May, has an unusual “one stop buyout” approach, so it can invest in equity, mezzanine or senior debt. It will both sponsor buyouts and invest in those by other sponsors, typically providing anything from €5 million to €500 million of financing per transaction. Its total capital pool now amounts to about €2.1 billion.

The Spanish office will focus primarily on mezzanine investments, to capitalise on the country’s booming buyout market. In this area the firm tends to target the consumer and leisure, industrials, healthcare, business and financial services sectors.

European Capital said it had invested €968 million since the start of the year, including €707 million in the second quarter alone. €55 million of this went to Spain, with recent deals including Amadeus, a travel business bought by BC Partners and Cinven in 2005, and Telepizza, the pizza delivery business bought by Permira last year.

Ira Wagner, European Capital president and chief operating officer of American Capital Strategies, said: “European Capital has established a strong base in Europe and the opening of the Madrid office is the next step in expanding our presence in the European marketplace.”