Spanish fundraising slowed in 2001

While the number of funds raised in the fist half of the year may have dropped from the year before, the total amount of capital committed remained the same.

Fundraising in Spain in the first half of 2001 decreased dramatically from the year before, according to a report compiled by José Martí, a member of the faculty if the Univesidad Complutense in Madrid and commissioned by Mercapital Servicios Financieros and 3i Europe, the private equity firms.

During the first half of last year, the equivalent of E534.6m was raised for investment in Spanish private equity, said the report. The total raised during 2000 was around E2.5bn, whereas in 1999 and 1998 the total stood near the E500m mark.

Despite this slowdown, investment activity held up firm. According to the study, E597m were invested in 198 deals during the first six months, a similar level to 2000 when E1.13bn was invested over the full year. 117 of the 2001 transactions were new investments, the rest were additional commitments to existing investee companies. The five largest investments accounted for 75 per cent of the total committed.

The study predicts that the Spanish investment market will experience above average growth rates due in the main part to the new environment created by the introduction of a single European currency in 2002. This environment will also create space for new technology companies to develop.

In anticipation of these opportunities, a number of international players established Spanish operations in 2001. These companies included the UK private equity firm Duke Street Capital Group (DSCG), which opened Iberduke Capital Partners in Madrid. The focus of the business will be to capitalise on the increasing size and number of mid market LBO transactions expected in Spain and Portugal in 2002. The US private equity firm, The Carlyle Group, also opened a Spanish operation, with offices in Barcelona and Madrid. Its plans are to focus on buyouts of leading family businesses.

Among the firms to establish new funds in 2001 was Qualitas Equity Partners, the Spanish private equity firm. It secured more than E30m for the first closing of its Qualitas Fund I in December, which is expected to close at E60m by the end of 2002.

Access to the full report is available at José Martí provides both the Spanish and the European Venture Capital Associations with data about the Spanish private equity market.