Top Investors Set Up Shop In Spain

Top Investors Set Up Shop in Spain

Top Investors Set Up Shop in Spain

Several international investment funds sniffing around Spanish assets have decided to install a team of professionals on the ground to analyse and take advantage of acquisition opportunities.

Top US dealmakers KKR and Blackstone are expected soon to open offices in Spain’s capital city of Madrid, and venture capital firms like BC Partners and Cinven are likely to follow suit in the coming months as the M&A scene heats up. An estimated war chest of nearly 13 billion euros has been earmarked by the venture capital industry for Spain in 2013, and investors are eyeing a slew of assets, including real estate and distribution companies with export potential. Industrial stakes in the hands of struggling savings banks obliged to sell assets to raise cash, and small companies seeking a financial lifeline amid a continued credit squeeze, are also on the radar.

ADVANTAGES OF BEING ON THE SPOT

KKR is certainly not a new kid on the block in Spain, having directly invested over 800 million euros in a wide range of local companies over the last three years. Its acquisitions include a 49 percent stake in renewable energy firm T-Solar and 18 percent of car parks and logistics parks manager Saba.

Up to now, operations have been handled from its London headquarters by a Spanish team commuting between the two countries. But a more hands-on approach is likely to be required given the expectations now for a busier couple of years ahead for corporate deals after a sluggish 2012. As the risk factor attributed to Spanish assets decreases and buyers and sellers gradually close the valuation gap on assets under the hammer, firms like KKR and its peers need to be ready and waiting in the wings to pounce.

Last October, KKR made an offer to buy bonds in Spanish hotel group NH Hoteles, with a view to possibly converting them to shares in the future. No agreement was reached but market watchers do not rule this out happening in the coming months. NH Hoteles´ majority shareholder is nationalised lender Bankia. It has to divest a raft of assets, including stakes in the airline IAG and power company Iberdrola, to comply with European Union regulations after its state rescue.

So would you consider setting up an office in Spain to directly monitor your investment targets? It might be worth “going native” in the long run! Contact Argali Abogados for more information!

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