Key Insights from the 2024 Spanish Private Equity Breakfast
November 19, 2024
Last week, Pedersen & Partners and CMS hosted the 2024 Spanish Private Equity Breakfast in Madrid, uniting global leaders to discuss ESG in fundraising, emerging trends in AI and FinTech, and strategies for value creation amidst geopolitical and economic challenges.
Special thanks to our co-chairs, Alvaro Arias Partner in charge of Iberia and Latam Region and the Global Head of the Private Equity Practice at Pedersen & Partners and Ignacio Zarzalejos (CMS), and our esteemed panel of experts: David Martin (Tikehau Capital), Tomás Neuhaus (Kartesia), Miguel Tiana (COFIDES), Ricardo Velilla (Aurica Capital), Lara Viada (Creas), Manuel Zayas Carvajal (Embarcadero Private Equity) for their invaluable insights.
Key Takeways from the discussion:
Spain as an Investment Destination 📈
Spain presents a compelling opportunity for private equity and debt investors, particularly in sectors such as agritech, infrastructure, and energy transition. While certain regions are emerging as technology hubs, the country still has significant room for growth, particularly in software development.
Executive Talent and Incentive Mechanisms 💼
Spain boasts a robust pool of highly trained and experienced executives. However, retention and incentive mechanisms at exit remain less competitive compared to other European countries, where leadership teams often receive up to 20% of the proceeds.
Fundraising Landscape 💰
Mid-market funds have begun fundraising, and larger fund managers are already engaging in substantial deals. An increased inflow of capital is anticipated once interest rates begin to decline.
Role of Public Entities 🏛️
Public agencies have become pivotal in the allocation of funds. For instance, Cofides and ICO in Spain are driving initiatives such as the FOCUS and FIS programs, supported by the European Union. These initiatives represent €2.5 billion and €400 million, respectively, and aim to deploy capital over the next four years, both directly and via fund managers.
ESG and Sustainability ♻️
Environmental, Social, and Governance (ESG) criteria play a critical role in fundraising across Europe. Sustainability and impact are treated as genuine investment priorities rather than mere administrative requirements.
Emerging Funding Sources 💸
Alternative fundraising avenues, such as search funds, are gaining traction in Spain, particularly within the lower mid-market segment.
We thank all our participants for their contributions to the engaging and forward-looking discussions, which are essential in driving collaboration and innovation within the private equity ecosystem.