Mercapital corrals more firepower for Fund III

Mercapital, Spain’s largest domestic private equity firm, has held a final close of its third buyout fund with €550m (US$732m) of commitments, above its original target of €500m.

A number of investors in Mercapital’s previous two funds re-invested in Mercapital Spanish Buyout Fund III, including Access Capital, Goldman Sachs, Pantheon and Unigestion. New limited partners in Mercapital’s fund include BP Pension, CAM Private Equity, European Investment Fund and Quartilium, managed by Finama and HypoVereinsbank.

Mercapital said that about 30% of allocations to the fund came from Spanish investors, both financial institutions and family offices. According to figures from ASCRI, the Spanish venture capital and private equity association, Spanish institutional investors are beginning to show an appetite for the asset class, and now represent about 50% of commitments in Spanish-focused private equity funds.

Javier Loizaga, managing partner of Mercapital and association chairman of the European Venture Capital and Private Equity Association until next June, said that Fund III differed from its predecessors as it had a 100% focus on buyouts, compared with about two-thirds for Fund II, which raised €600m in January 2001.

“This gives us the firepower to continue to take a leading role in mid-market buyouts in Spain, where we not only see an abundance of opportunities but also the ability to achieve superior returns to investors,” said Loizaga, adding that the fund was expected to be fully invested within the next three years.

Recent investments for Mercapital include Gasmedi, a Spanish medical gas provider, acquired in a €275m transaction in July; Saprogal, an Iberian animal feed producer, bought from Carlyle Group for €155m in late 2005p; and the sale of wind energy company Corporacion Eolica CESA alongside European mid-market buyout firm Bridgepoint to Spanish construction and energy group Acciona for €1.47bn in January.

MVision Private Equity Advisers was the exclusive global placement agent, while SJ Berwin, Ropes & Gray and PricewaterhouseCoopers advised Mercapital.