Exclusive: Diana to close above €100m next week

The Spanish firm will close the fund below its €150m target after three years in market.

Madrid-based Diana Capital is nearing a final close for its second fund, according to several sources familiar with the matter.

The fund, which came to market in 2011, will close just north of €100 million, below its original target of €150 million. The fund held a €100 million first close in January, with the formal final close scheduled for 30 April, the sources said.

Having spent three years in market, the firm decided not to spend further time on fundraising, one of the sources said. It will instead focus on investing the capital it has collected. “Now is the right time to invest [as] the Spanish economy is recovering,” the source said.

It is understood Eaton Partners has assisted with the fundraise. Eaton Partners was not immediately available to comment, while Diana declined to comment on fundraising.

Diana has faced a challenging environment on the fundraising trail. When the firm came to market, it was “impossible” to raise any capital for Spain, the sources said. “Sentiment has only picked up very recently.”

Despite the difficult fundraising climate, 90 percent of Diana’s existing LPs re-invested in Fund II. Diana also received backing from FOND-ICO Global, a €1.2 billion fund of funds of Spanish state-owned bank The Instituto de Crédito Oficial (ICO), which was created last year in a bid to improve Spanish companies' access to financing.

While Fund II is smaller than Diana initially had in mind, it is still larger than its debut vehicle, which closed on €70.2 million in 2001.

The firm has already put some of the capital in Fund II to work. Earlier this month it acquired a 40 percent stake in children’s clothing company Gocco. The Iberia-focused firm typically invests around €10 million of equity in each transaction.

Many LPs have been wary of backing Spanish funds in recent years. “We have seen a slow pace of investment in the last few years,” one LP told PEI. “Is Spain going to deliver the returns that we are looking for?”

Yet some GPs have braved the stormy fundraising conditions. Madrid-based firm Corpfin Capital, which came to market last summer, has already collected more than half of its €200 million target for its fourth fund, while Portobello Capital, another Spanish firm, is trying to raise €300 million for its latest fund.