{"id":2113,"date":"2017-03-30T06:00:20","date_gmt":"2017-03-30T04:00:20","guid":{"rendered":"http:\/\/eneasmagazine.com\/en\/?p=2113"},"modified":"2020-10-01T12:14:26","modified_gmt":"2020-10-01T10:14:26","slug":"spain-is-open-for-business-politics-aside-spain-offers-an-appetizing-opportunity-for-investors","status":"publish","type":"post","link":"https:\/\/eneasmagazine.com\/en\/bussines\/point-of-view\/spain-is-open-for-business-politics-aside-spain-offers-an-appetizing-opportunity-for-investors\/","title":{"rendered":"Spain Is Open for Business: Politics Aside, Spain Offers an Appetizing Opportunity for Investors"},"content":{"rendered":"\t\t
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2016 has been a tough year for Spain. After two elections and 10 months without a government, the center-right People\u2019s Party, led by Mariano Rajoy, was finally able to grab the reins of power, albeit without a majority of seats in parliament. Another election could be in the offing as early as May. Beneath the political tumult, however, the economy is quietly humming along. The IMF has lifted its estimate of Spain\u2019s economic growth to 3.1 percent for 2016, making it the envy of the developed world.<\/em><\/span><\/p>\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t

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The recovering economy, which is playing catch-up after a deep recession brought on by the 2008 financial crisis, has given a strong boost to Spain\u2019s private equity market. The country saw a record 72 private equity deals in 2015, totaling $2 billion, according to research service Preqin.<\/span><\/p>

But while the number of deals hit an all-time high, the dollar volume was the lowest in five years, reflecting a shift in private equity investment to small and medium-size enterprises. It\u2019s those companies that now provide the most inviting growth opportunities.<\/span><\/p>

Investors are starting to pay attention. A record 1.27 billion euros was raised in nine private equity fund closings in 2015, according to Preqin. Spain now has 25 private equity funds with a combined 3.6 billion euros of targeted capital.<\/span><\/p>

Still, the market is small compared to its potential, with those 3.6 billion euros accounting for just 0.3 percent of Spain\u2019s gross domestic product (GDP). That compares to $1.34 trillion in the US, or roughly 7 percent of GDP.<\/span><\/p>

“So where are the most promising private equity investments? The list starts with disruptive companies that are bringing new products and new ways of doing things, of which Spain has its fair share.”<\/strong><\/span><\/p><\/blockquote>

The companies that are most likely to be disruptive are the smaller and more agile firms. In addition to their growth prospects, smaller firms often offer more attractive valuations than their larger brethren and there is often less competition among investment funds to garner a stake in these companies.<\/span><\/p>

The sectors of the Spanish economy with this kind of appeal include telecommunications, transportation, medical technology, biotechnology, education and real estate.<\/span><\/p>

When it comes to telecommunications, I see opportunities in young companies providing services that complement traditional offerings from telecom, cable and satellite incumbents.<\/span><\/p>

On the medical technology front, two overriding factors are driving innovation in the provision of healthcare services. First is the issue of rising costs for medical care. Second is a concern for patient safety. Technology plays a key role in both areas.<\/span><\/p>

Recent examples of private equity investments in disruptive small- and medium-size Spanish enterprises include the following:<\/span><\/p>