Exclusive: Nmas1 Mercapital loses managing partner

His departure comes just days after N+1 Mercapital merged with Dinamia, a Spanish-listed private equity firm

Madrid-based N+1 Mercapital has lost its managing partner, Carlos Barallobre, PEI has learnt.

Barallobre who has spent more than 20 years in Spanish private equity, has decided to pursue “a significant career change”, he told friends and colleagues in an emailed message.

“After serious and deep thoughts, I have come to a decision to put an end to my +20 year career at Mercapital and N+1 Mercapital. Those have been years of enormous learning and great moments shared with my colleagues, investors, managers and intermediaries,” he said.

“This might be a surprise to you, but I have decided to…leave the financial sector and seek for a traditional project in “industry”. This is my current ambition (and challenge!) and I think that the moment has come and is the right one,” he added.

“I am personally very satisfied with the work done and the return I have contributed to generate to our LPs and I would like to give my sincerest thanks to all of you people by writing this mail.”

Whilst handing over its responsibilities at N+1 Mercapital, Barallobre will continue to serve at the board of some of the firm’s portfolio companies, he said.

Barallobre became a member of the N+1 Mercapital team in 1993, and has led, or played a key role in investments in the the health, business services and tourism and industry sectors, according to N+1 Mercapital’s website.

Barallobre’s departure has not triggered a key-man clause, according to an N+1 Mercapital spokesperson. Barallobre’s departure comes a year after N+1 Mercapital lost its chief executive Javier Loizaga. In a letter to investors seen by PEI, N+1 Mercapital said the “key reason” for Loizaga’s resignation was a “discrepancy between him and the rest of the partners of N+1 Mercapital over the resources to be committed by the firm to raising local funds in Latin America”.

“As a result, Javier decided not to be the leader of the team that will be raising the Spanish International Growth Private Equity Fund,” according to the letter. It is understood Loizaga’s departure as chief executive did not trigger a key-man clause. He has since been replaced by Gonzalo de Rivera, according to the firm’s website.

Barallobre’s departure comes just days after the firm merged with Dinamia, a Spanish-listed private equity firm to create a European mid-market financial advisory and investment specialist, N+1 Mercapital said in a statement.

The joint entity will have three business lines: investment banking, asset management and direct investment in companies and investment funds, with a presence in Germany, the UK, France, Spain, Italy, Switzerland and Turkey.

That merger comes two years after N+1 Mercapital was formed, following the merger of two Spanish private equity firms N+1 and Mercapital to reinforce their international expansion. Mercapital Spanish Buy Out Fund III, a €500 million 2006-vintage, is fully invested, with some left over capital for add-on acquisitions. As of August 2014, N+1 Private Equity Fund II, a €300 million 2007-vintage, was understood to be approximately 85 percent invested.

In recent years, the joint entity has been focused on realising investments. In August, N+1 Mercapital sold its stake in Clece, a facility management business, to ACS Group, a Spanish construction and services business. The divestment generated N+1 Mercapital a capital gain of €49 million and an annual return of 22 percent, the firm said at the time. Recent examples on top of Clece exit are the sale of the hospital group Xanit, the canning company Mivisa, the recap of the parking company Eysa and the dividend payout of Salto Systems, the firm told PEI in August.

The firm was planning to come to market in the second half of 2014, PEI reported last year. The firm aims to raise a €500 million vehicle which will target Spanish mid-market companies with clear international expansion plans.