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Mercapital: largest Spanish buyout fund

Spanish private equity firm Mercapital Servicios Financieros has closed its second fund at E600 million, making it the largest private equity fund in Spain to date, according to Javier Loizaga, executive partner at Mercapital. Merrill Lynch acted as placement agent during the fund raising process, which started in May last year and ended in December.

The fund raising exceeded the original target of E500 million, around double the size of Mercapital’s first fund, Mercapital Spanish Private Equity Fund I (SPEF I), which closed on E260 million in April 1998 and is now fully invested.

Loizaga expects this latest fund to be invested within three years and will invest in Spanish companies, since it is structured as a Spanish country fund. However, the fund is targeting companies in Spain that are looking to expand beyond Spain into Continental Europe. So far around 20 per cent of the Fund II has been committed to two transactions including E82 million to Guascor a renewable energy company. The second investment, for around E40 million, is expected to sign shortly.

Of the investors in Mercapital SPEF I, 75 per cent have reinvested in Mercapital SPEF II providing approximately 50 per cent of the total amount raised by the new fund. Fund II has secured commitments from over 40 institutions and investors worldwide, with 22 per cent coming from the US, 20 per cent from the UK, nine per cent from the Far and Middle East, ten per cent from Spain and 39 per cent from other European countries.

Of the total amount raised, 37 per cent has come from funds, 24 per cent from banks and insurance companies, 15 per cent from pension funds while the remainder has been provided by other entities including corporates and family offices. Included in the list of institutional investors are; Goldman Sachs, NIB Capital, Pantheon, HarbourVest Partners, SEB, Standard Life, Partners Group, GE Equity, AXA Investment Managers, Access Capital Partners, Royal Bank of Scotland, and Merrill Lynch.