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Portuguese private equity fund raises E50m

A Portuguese private equity fund has raised E50m to help Portuguese companies invest in Spain. The Explorer I fund is targeting E75m and aims to hold a final close by November this year. The fund is already twice as large as any previous fund raised in Portugal.

Portugal's private equity market is still relatively immature, with private equity funds representing just 0.09 per cent of gross domestic product, compared with 0.25 per cent in Europe as a whole and 0.65 per cent in the UK. The Explorer fund is seen as a significant step towards building a flourishing private equity market in the region.

The fund will invest in companies valued at between E25m and E50m and will focus on industrial and service companies.

'Portuguese companies are beginning to open up to the idea of private equity,' Rodrigo Guimaraes, one of Explorer Investments' four partners told the Financial Times. 'Portugal has enough quality companies in a position to acquire Spanish groups with a three to five per cent share of their regional markets for us to maintain strong deal flow,' he added.

The majority of LPs that have committed to the fund to date have been Spanish institutions. Caja Nova, a Spanish savings bank, has a 20 per cent stake in the management company and seven other regional banks are among the main investors. API, the state investment agency, is one of the leading Portuguese investors.

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