Spanish asset manager N+1 is courting a newly created state-backed fund investor as it seeks to push its latest fund up to its €450 million hard cap.
The firm held a first close on €400 million in April for its third private equity fund and is currently in talks with state-owned bank Instituto de Crédito Oficial, which could commit up to $50 million through its private equity vehicle launched in November, and bring the fund to a final close of €450 million, the firm said.
N+1 Private Equity Fund III’s management team has committed 10 percent of its final size, which will be the biggest mid-market fund raised in Spain since 2008, the firm said.
Portobello Capital is the only Spanish firm to raise a similar-sized vehicle in the past year, reaching final close on €422 million for its first secondaries fund, according to PEI Research & Analytics.
Fund III, which started fundraising in July last year, is significantly larger than its previous 2007-vintage vehicle that raised €304 million. That vehicle was able to invest up to €460 million with additional co-investment funds from Dinamia Capital, with which the firm merged in 2015, a source familiar with the matter told Private Equity International.
Investors in Fund III include Spain’s Centre for the Development of Industrial Technology with a €100 million cornerstone commitment, as well as Spanish family offices, the European Investment Fund, the European Investment Bank and other European institutional investors such as fund of funds Access Capital Partners, the source said.
Fund III will make eight to 10 majority stake investments in Spanish and Portuguese mid-market companies with an equity value of €35-75 million and international expansion plans, targeting predominantly industrial and technological sectors. It follows the same strategy as the firm’s previous two vehicles and has yet to make any investments.
Plans to restructure Fund II were explored and then dropped, the source said, noting that vehicle is expected to deliver returns of more than 2x on invested capital.
The Madrid-based firm was offering investors the option to buy stakes in N+1 Private Equity Fund II and Mercapital Spanish Buyout Fund III, both raised in 2007, in an effort to boost fundraising for N+1 Private Equity Fund III, PEI’s sister title Secondaries Investor reported in September.
In July, Fund II exited Spanish car parking operator Estacionamientos y Servicios, to a financial investor for €82.4 million, the firm said.