Private Equity News & Analysis

Mercapital SPEF Fund II closes at E600m

SPEF II, which has beaten its initial target by E100m, is the largest Spanish fund to date.

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Madrid-based private equity firm Mercapital Servicios Financieros has raised E600m at the final closing of its Mercapital Spanish Private Equity Fund II (SPEF II). The group has made co-investment agreements with fund investors which it says will enable it to expand its investment capacity well above the E600m figure.

Investments will focus on buyout-type transactions, buy-and-builds and larger growth capital transactions in Spanish middle market companies. The size of investments has not been limited.

Investors in the fund include Goldman Sachs, NIB Capital, Pantheon, HarbourVest Partners, SEB, Standard Life, Partners Group, GE Equity, AXA Investment Managers, Access Capital Partners, Royal Bank of Scotland, and Merrill Lynch.

The fund was launched in May 2000. It was originally targeted to raise E500m. 75 per cent of investors in the company’s previous fund, Mercapital Spanish Private Equity Fund I (SPEF I), reinvested in Mercapital SPEF II providing approximately 50 per cent of the total amount raised by the new fund.

Commitments were secured from over 40 institutions and investors worldwide, with 22 per cent coming from the US, 20 per cent from the UK, 9 per cent from the Far and Middle east, 10 per cent from Spain and 39 per cent from other European countries. Of the total amount raised, 37 per cent came from funds of funds, 24 per cent from banks and insurance companies, 15 per cent from pension funds and the remainder came from corporates and family offices.

The group was advised by the New York and London offices of Merrill Lynch.

Since the launching of its previous fund in 1998 the Mercapital group has led investments of over E300m in 11 Spanish companies including Occidental Hotels, Nacional Motor and Grupo Logístico.

Research from SJ Berwin, the European law firm, indicates that recent tax reforms have made Spain an increasingly attractive option for private equity investors. Changes to the taxation of capital gains – down to 18 per cent from 20 per cent previously – as well as to the tax rules for holding companies and venture capital vehicles have helped improve the economic climate for private equity investors, the lawyers say.