Private Equity Doubles Investment in Spain & Hits €620 Mn

26/05/2014 – Expansion

The unsatisfied apetitte for Spanish real estate shown by the foreign investors – for hotels, offices and headquarters – casts certain risk. “There is a risk of market overheating”, said KKR´s chairman Juan de Ochoa at the 55th meeting of the Spanish Association of Private Equity Entities (or Ascri by its name in Spanish).

Carlos Carbó, co-founder of Nazca Capital, justifies the confidence boom in Spain by “good prices and high yields” and says that the investors believe the worst has already passed.

That is why, according to Felipe Moreno leading Bridgepoint, there is a need of diversification “not focusing on traditional approaches because the returns may deceive and provoke inflation” in the real estate sector. Moreover, he criticized the over-enthusiastic statement that “Spain is cheap” because such belief may be “counterproductive”.

 Spain is back in for private equity also thanks to lending entities that “allow forgiveness to maintain a company´s solvency”.

According to Ascri´s director Carlos Lavilla, the investment carried out but the private equity during the first quarter of 2014 reached €618 million, that is double as much as in the same period a year before with €310 million.

The number of transactions conducted between January and March is similar to the previous year´s first quarter performance and marks around 100. About 90% of these corresponded to growing SMEs.

Moreover, growth equity showed increase in investment, for instance the €150 million invested by Corpfin Capital and the €100 million by Sherpa Capital. Inveready Biotech II and Suma Capital Growth enlarged their capitals as well.

Other examples

The first quarter of this year has seen such operations like KKR´s purchase of Port Aventura, Eurazeo putting cash in Desigual, Proa Capital in Rotor, Springwater in Pullmantur and Baring Private Equity in Forus.

As Ascri claims, the second quarter of the year will register such transactions closings as Corpfin Capital acquiring FCC´s logistics platform, Dogi buying Sherpa and Gestair – Nazca, among others. In April, KKR decided to inject €225 million in fresh capital into Grupo Gallardo.


Original article: Expansión (by A. Zanón)

Translation: AURA REE