Insights from the 2022 Spanish Private Equity Breakfast hosted by Pedersen & Partners in association with CMS Albiñana & Suárez de Lezo

  • What are the recent developments and trends in the Iberian M&A market – including deal flow, valuations, funding, availability of credit for leveraged financing, exit strategies, and co-investments?
  • Where are the high opportunity sectors and market segments?
  • Which value creation and portfolio management strategies are applied across asset classes?
  • How do turnaround and change management, succession planning, and talent retention bridge the disconnect between valuations and company performance? What is the impact of external factors and regulations?

These were just a few of the questions raised at the 2022 Spanish Private Equity Breakfast in Madrid, co-hosted by leading global Executive Search, Leadership Consulting and Board Services Pedersen & Partners together with international law firm CMS Albiñana & Suárez de Lezo. The event provided a lively and agile atmosphere for representatives of well-known Spanish and international private equity funds to discuss, debate and network.

The high-calibre event gathered more than 90 attendees to ensure a range of perspectives, and the panel discussions were led by Celia Andreu – Partner & Head of Sustainability, MCH; Imanol Almudi – CEO, Agroponiente (portfolio company of Abac Capital); Alejandro Diazayas – Managing Partner, Nexxus Iberia; Jaime Fernandez-Rubies – Managing Director, Fremman Capital; Ivan Plaza Ferriz – Managing Partner, Aurica Capital; Alejo Vidal-Quadras – Partner and Head of Southern Europe, bd-capital. The panel discussion was co-chaired by Ignacio Zarzalejos – Partner, Corporate/M&A, CMS Albiñana & Suárez de Lezo and Álvaro Arias, Partner, Head of Private Equity Practice, Pedersen & Partners.

Alvaro Arias, Partner and Head of the Private Equity Practice Group at Pedersen & Partners, summarised the key takeaways from the lively debate as follows:

  • The Spanish sectors most affected by the current situation (inflation, increased raw material costs, logistics problems and increased debt interests) are: personnel-intensive sectors, industries with high energy consumption, transport and consumer/retail.
  • Sustainability, digitisation, and disruptive technologies are providing new opportunities. Spain has a renewable energy hub with extensive knowledge and experience that can be exported to other countries. Tourism-linked businesses are experiencing a strong recovery that may be sustainable in the long term.
  • It is getting more and more difficult to raise new funds. This is due to the reluctance of LPs and intense competition from large fund managers, which account for 42% of this year’s total volume.
  • However, a speedy recovery of the flow of funds is expected. Differentiation will be a key factor in fund raising.
  • Strategies to create value in portfolio companies include: greater involvement of managers, redefinition of business plans, alignment of first and second level executives, adjusting speeds, redefining profiles, specialising and distributing responsibilities and functions.

Despite lingering pandemic concerns, the race for the best deals is set to continue, as Private Equity continues to consolidate its position as an active investment asset class. Spain remains a good destination for mid-market investment with good opportunities, and there are still some discounts in valuations compared to other European countries.

 

Pedersen & Partners is a leading global Executive Search, Leadership Consulting and Board Services firm. We operate 54 wholly owned offices in 50 countries across Europe, the Middle East, Africa, Asia & the Americas. Our values Trust, Relationship and Professionalism apply to our interaction with clients as well as executives. More information about Pedersen & Partners is available at www.pedersenandpartners.com

Alvaro Arias

Alvaro Arias

Alvaro Arias is the Partner in charge of Iberia and Latam Region and the Global Head of the Private Equity Practice at Pedersen & Partners. With over 17 years of Executive Search experience, Mr. Arias has successfully completed Private Equity assignments across Latam and Europe, with mandates in industries related to energy transformation, circular economy, renewables, and infrastructure. Prior to joining the firm, Mr. Arias held senior positions at Neumann and Egon Zehnder. Before launching his Executive Search career, he served at AT Kearney, and was a Professor at IESE Business School. While at IESE, Mr. Arias founded a corporate financial services boutique and the IESE International Finance Research Centre. Mr. Arias graduated as an Engineer from the Polytechnic University of Madrid. He holds an MBA from IESE Business School and has completed the Doctoral Program in Corporate Governance from the City University Business School in London. He speaks native Spanish, fluent English and conversational Portuguese.