Ignacio de Garnica (PwC): "The big funds are looking to the Spanish listed companies this year"
2021 has been a spectacular year for the private equity sector in Spain, with a new investment record and the second best record: 7,494 million invested according to Ascri. In these first months of 2022, transactional activity is maintained, pointing to another year of historical maximums with large transactions in progress.
The year promises another record year for venture capital, what are your prospects?
There is undoubtedly a lot of activity in the private equity market, although a number of macro factors are generating some uncertainty, such as inflation levels, potential rate hikes, escalating energy costs, the potential geopolitical conflict between Russia and Ukraine etc Despite the foregoing, I am convinced that private equity will continue to grow, consolidate and prove to be a relevant part of the economy and contribute to economic growth through the competitiveness of the business fabric, job creation and innovation.
International funds continue betting on Spain and leading the big operations .
Yes, more and more international funds are interested in Spain, which is leading to greater competition. But in addition to carrying out the largest operations, they have also been active in the middle market ( middle market ) with their new minority ( growth ) or technology ( tech ) funds. We observe an increase in mergers and acquisitions (M&A) activity in all sectors, although with greater weight in the most resilient such as technology, health, consumption, agri-food, retail and education, as well as any other where technological innovation is relevant and we will also continue to see a lot of movement in the energy sector driven by the energy transition.
Will private equity funds continue to gain weight against corporate groups? They have gone from 17% of the total value of operations in 2020 to 51% in 2021...
Private equity funds are undertaking larger and more complex operations. In 2022, it is foreseeable that this trend will continue to be driven by the high availability of capital, the capacity for financial leverage and low interest rates. In all the relevant processes underway there is strong interest from the main international funds, with growing pressure to invest and generate returns. The large operations, carried out by international funds, and the competitive processes, which have marked the activity of the sector in 2021, will continue to set the pace in 2022, where the continuity of megadeals is expected .
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