Following the 2020 downturn caused by the pandemic, mutual funds and family offices shifted their focus toward investments, including businesses in the Valencian Community. Last year, the region posted notable activity, recording the largest capital inflows outside the country’s main hubs and ranking third nationwide for engagement after Madrid and Catalonia, with Barcelona as a standout center. As prices rose, the hunt for stable, inflation-beating returns became increasingly intense, narrowing the field of investable opportunities.
Direct investments from funds into Group companies during the past year totaled €323.3 million, according to the Ascri employers association guide recently renamed SpainCap, which aggregates the leading private equity players in Spain. This figure marks a 66% increase from 2020, yet it remains well below the €784 million reached in 2019, a peak driven by several large-scale deals. With this performance, the Valencian Community positions itself as the third country region by investment volume. Madrid accounted for more than 60% of total investments, totaling €4,655.3 million in this strategy, while Catalonia reached €1.519 million. The ranking also highlights Andalusia with €170.1 million and the Basque Country with €120 million, though it is frequently discussed in this context. In total, private funds injected €7,572 million into Spanish companies last year, up nearly 20% and marking the second-highest level in the historical series.
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The overall distribution reached €323 million across 94 operations, up 19% from the previous year and the highest figure in recent memory. Notably, there was a substantial share of early-stage investments, making up more than two-thirds of the total with 66 operations. Several startups achieved a funding high, with a record €108 million in funding, according to the same sources.
British Engineered Stone Group acquired the Alicante shower tray manufacturer Nuovvo.
“There is strong appetite in the market, ample liquidity, and a clear question about how to identify companies that match the criteria investors are seeking,” states David Devesa, CEO of the law firm Devesa & Calvo, a major player in this market with a newly opened Madrid office intended to channel family-office investments from the capital toward firms in the Community.
The expert notes the most in-demand targets, with an average deal size in the EBITDA range of two to three million euros and room for growth. In terms of sectors, Devesa points to sustained interest in manufacturing and related industries due to their resilience during the pandemic, provided profitability criteria are met. The hotel sector remains attractive from a strategic viewpoint, but the main hurdle is that most funds are prepared to pay lower prices than those asked by current owners.
Additionally, Devesa highlights that investors are not limited to funds and family offices. Corporate groups seeking expansion through acquisitions are scanning the market as well, aiming to accelerate growth without heavy reliance on bank debt.
Korott joins the German firm Euro Vital to form a group with a turnover of €100 million.
Among notable corporate moves in the past year, ES Group, a British holding backed by the Cranemere fund, acquired Nuovvo. The nutrition supplement producer Korott attracted €25 million from the German fund Capiton, with collaboration from EuroVital Pharma and Elche’s PLD Areafor for a project to launch the first Spanish rocket into space. Locally, Elche-based Alzis and investment firm Valectra have recently expanded their footprint in the travel consolidator CDV Group.
While many local entrepreneurs remain cautious about placing capital in their own firms, the landscape is shifting as a new generation of owners sees investors as a viable path to growth without resorting to bank debt.
Will discount prices and opportunistic funds return?
As funds continue to seek highly profitable, viable companies, attorney David Devesa does not rule out a possible return of opportunistic vulture funds if the economy worsens. Such funds historically targeted distressed assets after the real estate bubble, when bankrupt savings banks and developers held significant holdings. That period helped spawn many new operators who now influence Spain’s housing development sector as it stands today. The market’s current dynamics are partly shaped by these past plays, though the focus remains on sustainable growth and solid profitability for the ventures receiving investment (Ascri/SpainCap report).