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Portobello Capital launches €300m minority-focused fund

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Spanish GP Portobello Capital has launched Portobello Structured Partnership I, a new vehicle targeting minority investments across Spain, with a €250m target and €300m hard-cap. 

The GP intends to hold a first close in Q1 2020 and expects to hit its hard-cap by the end of the summer.

In addition to this new fund, Portobello is currently managing Portobello Capital Fondo IV, which closed on €600m in December 2017, surpassing its €570m hard-cap The fund is now around 60% deployed and invests in Spanish mid-market companies operating in a variety of sectors, with enterprise values of €50-500m, deploying equity tickets in the €30-100m range.

Portobello also manages the remaining portfolio of Portobello Capital Fondo III – which closed on €375m in August 2014 – as well as a secondary €300m vehicle, Portobello Capital Secondary Fund, which will be fully divested by the end of 2020. 

Investors
Portobello plans to build a diversified base of LPs, primarily family offices, pension funds and insurance companies from Spain and the rest of Europe.

It expects most of the European LPs from its previous vehicles to re-up, while increasing the percentage of local LPs, following the growing interest in this asset class shown by Spanish investors. In addition, Fond-ICO Global and the European Investment Fund (EIF) might commit to the fund capital.

Investments
Portobello Structured Partnership I will target minority stakes in mid-market companies based primarily across Spain, but also in the rest of Europe, generating EBITDA in the €10-50m range. It will deploy equity tickets of €20-50m.

People
Portobello Capital – Juan Luis Ramirez (founding partner). 

Minority investing in southern Europe

Portobello Structured Partnership I is one of the very few minority-dedicated funds being raised in southern Europe, where the minority investing space continues to represent a niche within the local private equity landscape.

However, an abundance of dry powder and the forecast economic downturn on the horizon have pushed generalist funds towards experimenting with more diversified and varied ways of deploying their capital. In the last year, the number of minority deals has been rising in the region, off the back of a trend already prominent in more mature markets.

Southern Europe recorded 130 minority deals worth an aggregate €6.7bn in 2019, according to Unquote Data.

Notable deals inked in Spain include Three Hills Capital Partners investing €45m in Goal Systems, a provider of optimisation software for the transport industry, in exchange for a minority holding; and Meridia Capital acquiring a minority stake in pet care specialist Kipenzi.

Meanwhile, in Italy, Tikehau Capital invested €29m in co-living company DoveVivo in exchange for a 19% stake and subsequently bought a 23.4% holding in insurance broker Assiteca via a €25m capital increase.

Later on last year, private equity investor Nuo Capital acquired a stake of around 30% in personal care products manufacturer Ludovico Martelli; NB Aurora bought an 11% holding in leather producer Rino Mastrotto for €20m; and FSI bought a 19.6% stake in biopharmaceutical company Kedrion for €100m.

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