The bad airs that hit the Venture Capital and Private Equity industry in Spain during the first months of the pandemic seem increasingly a thing of the past. And so the data reflects. The volume of investment in Spain reached 4,844 million euros in the third quarter of the year in 618 investments, which represents an increase of 18.4% compared to the same period of the previous year, while Venture Capital has exceeded highest recorded, with 1,228 million divided into 512 investments .
This was revealed in the eighth edition of the Annual Conference for Private Equity Managers and their Investors (Lps & GPs Spanish Conference) , which EY and ASCRI held this Thursday. The meeting was attended by Juan López del Alcázar, partner in charge of the Strategy and Transactions area of EY and the Private Equity sector, and Aquilino Peña, president of ASCRI.
“The Private Equity industry continues to grow and we are facing a possible record year for global investment if the trend registered in the first half of the year is confirmed, with 539 million dollars,” said the head of EY. For this scenario to occur, it is necessary to take into account two factors: impact and sustainability.
“All the players of this industry represented in the different panels (investors and managers) ensure that at this time the creation of value is a requirement for any investor and this goes beyond the simple requirement of non-financial reporting . Much of the literature it shows us how there is a positive correlation between this creation of value and the financial and operational performance of the company. There is no doubt that we are moving towards a sustainable future through Private Equity “, added López de Alcázar.
The president of the employers’ association has celebrated that “the data for the third quarter demonstrate the strength and resilience of the Venture Capital & Private Equity industry in Spain. And they also reflect the confidence that international investors continue to give to Spanish managers, that have made a great effort during the pandemic supporting and encouraging their investees for their survival and to prepare them for the subsequent rebound “.
The meeting was also attended by Ignacio de la Torre, chief economist at Arcano Partners. The expert has analyzed the keys to the economy in the post-covid era and has concluded that “the understanding of monetary policy leads to the conclusion that we will live a period of five to ten years of negative real rates; that will cause not the largest displacements from history to private capital “.
The data collected by ASCRI show that, depending on the type of investor, the investor appetite of international funds, both Private Equity and Venture Capital, is maintained, which have abundant liquidity and maintain interest in Spain. In the first nine months of the year, they contributed more than 80% of the total volume invested in Spanish companies (maintaining the weight of recent years).
Likewise, maximums have been registered in Venture Capital (512 investments) and in the number of investments in Private Equity (106). The national managers slightly increased the volume of investment, 925 million in the third quarter of 2021 compared to 847 million in the same period of 2020 in a total of 372 investments directed to Spanish companies.
By size of investments, the five major operations in four companies above 100 million registered in the first nine months of the year concentrated a volume of 2,540 million, more than half of the total volume registered. These are Urbaser (Platinum), Idealista (Oakley and Apax), Alvinesa (ICG) and Job and Talent (the Soft Bank).
A very active middle market
The middle market continues to be very active and this year it has maintained the dynamism of recent years, both in volume (1,498 million) and in number of operations (79 investments). Until two years ago, this segment was led by national Private Equity managers , and now it is divided between national and international managers and with a high presence of Venture Capital.
Eliminating the impact of large operations on the total volume, investment in tickets grew below 100 million, which has meant reaching a maximum in investment volume in investments between 0 and 100 million.
Venture Capital has exceeded all the maximums, in part due to the high number of tickets above 10 million euros that contributed to finance the great rounds of Job & Talent, Wallapop, Travelperck or Copado, and which were led by international funds. Venture Capital registered a volume of 1,228 million in the third quarter of 2021 compared to the 511 million euros registered in the same period 2020. These data show the maturity and strength of the technological ecosystem , with increasingly innovative and vocational projects international.