2017SURVEY Venture Capital& Private Equityin Spain

Príncipe de Vergara, 55 4º D • 28006 Madrid

tel. (34) 91 411 96 17 • www.ascri.org

WITH THE SPONSORSHIP OF

SURVEY Venture Capital & Private Equity in Spain 2017

Private Equity & Venture Capital in a changing global environment

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Private Equity & Venture Capital in Spain

SURVAY2017

Sponsor by:

THIS SURVEY WAS ELABORATED BY:Dominique Barthel (ASCRI Managing Director) and Ángela Alférez (ASCRI Head of Research), from the data obtained and collected byJosé Martí Pellón (Universidad Complutense of Madrid) and Marcos Salas de la Hera (Webcapitalriesgo.com)

Copyright ASCRI ® 2017

The Spanish Venture Capital & Private Equity Association (ASCRI) is the industry body

that units and represents the sector to the authorities, Government, institutions, investors,

entrepreneurs and media. ASCRI regularly communicates and provides statistics

and updated information regarding the developments of the tax and legal framework.

ASCRI also organizes a range of activities (training courses, events and round tables)

for the members and general public in order to disseminate and reinforce the contribution

of the Venture Capital & Private Equity industry for the economy and growth of SMEs in Spain.

ASCRI comprises almost 100 national and international Venture Capital & Private Equity

firms, five limited partners and over 50 service providers, spreading and ensuring the professional

standards among its members: transparency, good governance and best practice.

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IND

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5INDEX

CHAIRMAN’S LETTER 7

SUMMARY OF THE YEAR 2016 9

FUNDRAISING 12

INVESTMENT 14

DIVESTMENT 18

PORTFOLIO 19

VENTURE CAPITAL 20

2016 MAIN TRANSACTIONS 27

STATISTICS 33

THE REGULATORY FRAMEWORK IN PERSPECTIVE: QUESTIONS UNDER REVIEW 46

GENERAL PARTNERS INCLUDED IN THIS SURVEY 50

Torre Europa Pº de la Castellana, 95, 29th fl oor 28046 Madrid - SpainTel.: +34 914 262 329 diana@dianacapital.com www.dianacapital.com

Our goal is to support the expansion plans of leading companieswith high growth potential and international projection

Recent transactions

Quick service restaurants

High performance steel components

Solar energyChildren’s clothingSmartphones,

tablets, 3D printers and robots

7

Figures from 2016 confirm that the Venture Capital & Private Equity sector is definitely entering a new stage of growth. Following an end of 2015 and start of 2016 that were overshadowed by a national political scene that slowed fund closings and execution of large transactions, the sector achieved strong results in 2016 across all key indicators: fundraising, investment and divestment. Private domestic entities raised nearly €2,271 million in new funds (+48.5% from 2015) and fundraising conditions remain favorable: market liquidity, international investor interest and support for the sector from public Funds of Funds (Innvierte and Fond ICO Global). As regards investment, we saw a continued positive trend with investment volumes in excess of €3,600 million, thanks in large part to the momentum of international GPs, representing close to two thirds of total investment this year, resulting in the recovery of large transactions and megadeals (9 investments over €100 million in 8 companies). Following two years of heavy divestment, divestment levels have slowed but continue at a healthy pace (close to €2,000 million).

I would like to once again express our sincere gratitude for the unwavering support of our sponsor of this publication –DIANA CAPITAL–, who has for the past ten years encouraged us to improve and expand distribution of this report. I also wish to thank all the Venture Capital & Private Equity Firms that responded to our survay used to build these statistical data as well as to the team at Webcapitalriesgo who once again compiled and processed the statistical data for ASCRI, this time through our new European EDC Platform. To all of them, many thanks for their interest, time and work.

Please let me remind you that this report may be downloaded from our website (www.ascri.org) in both English and Spanish. Please don’t hesitate to send us comments on how to improve the next issue.

Juan Luis Ramírez Chairman

CHAIRMAN’S LETTER

I have the pleasure, as the Chairman of ASCRI, of presenting this annual report on Venture Capital and Private Equity activity in Spain during 2016. We have been publishing these reports for over 30 years, although the statistics collected have obviously evolved over the years, with data becoming increasingly

detailed, reliable and comparable to those collected in other European countries. The EDC Platform –collecting and processing statistics on our sector from across Europe– was implemented in the second half of 2016. This is the materialization of 6 years of work by ASCRI and other european National VC&PE Associations. This new process for gathering and preparing statistics will play a crucial role in enhancing reliability, consistency and confidence in our sector.

Torre Europa Pº de la Castellana, 95, 29th fl oor 28046 Madrid - SpainTel.: +34 914 262 329 diana@dianacapital.com www.dianacapital.com

Our goal is to support the expansion plans of leading companieswith high growth potential and international projection

Recent transactions

Quick service restaurants

High performance steel components

Solar energyChildren’s clothingSmartphones,

tablets, 3D printers and robots

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1 For the sake of consistency between our methodologies and those followed by other National Venture Capital and Private Equity Associations in Europe, investment figures refer to investments made by domestic (public and private) and international GPs in Spanish companies. Therefore, investments made by Spanish GPs outside of Spain, which totaled €578M across 84 investments in 2016, are not included.

SUMMARY OF 2016 AND OUTLOOK 2017

A good year for the sector despite political uncertainty

Despite slowdowns in sector activity during the first half of the year due to political uncertainty in Spain and abroad, 2016 turned out to be a very positive year for the Spanish Venture Capital and Private Equity (Capital Privado) sector. Investment momentum in the second half of the year was strong, in part thanks to the significant activity of large international funds who closed several transactions including 9 large transactions (>€100M in equity) in 8 companies.

Domestic LPS drove fundraising

Private domestic entities raised €2,271M in 2016 (+48.5% from 2015). Domestic LPs raised 61.9% of total funds in the sector, and the public Funds of Funds Innvierte (managed by CDTI) and FOND-ICO Global (managed by Axis) played a significant role in stimulating domestic fundraising in the last years. Middle market vehicles stand out as regards new funds raised by private VC&PEs: Alantra Private Equity Fund, Artá Capital Fund II, Fondo Nazca IV, MCH Iberian Capital IV (first closing), Aurica III (first closing), BTC II and Realza Capital II. Several funds were closed to finance start ups, including Ysios BioFund II Innvierte, Kibo Ventures Innvierte Open Future, Kanoar Ventures, Bullnet Capital III, BeAble Innvierte KETs Fund, Samaipata I and Swanlaab Giza Innvierte I. In 2016, total funds raised by Private Equity GPs totaled €1,702M, whereas Venture Capital GPs totaled €568M. Funds available for investment (dry powder) increased by 41%, totaling approximately €4,150M.

International funds continue to show interest in the Spanish market

Investment volume exceeded €3,619.7M1 in 603 investments (+33.6% by volume, +4% by number of investments), with a particularly strong second half of the year that accounted for 73% of total investment.

International funds invested €2,601M (+53.4% from 2015) –accounting for 72% of total investment in Spain in 2016– in 82 investments, of which 9 were large investments (compared to 5 in 2015): Hotelbeds by Cinven and CPPIB, MásMovil by Providence, Cupa Group by The Carlyle Group, Tinsa by Cinven,

Garnica by Intermediate Capital Group, Invent Farma by Apax Partners, Renovalia Energy (Cerberus Capital) and MaxMobility Spain (Cabify) by Rakuten. These 9 investments represented 54% of total invested volume (€1,405M).

On the other hand, domestic VC&PEs invested a total of €1,018M in 521 investments (86% of total investments in 2016).

The sectors that received the highest volume of investments were the following: Leisure (25.7%), followed by Consumer Goods (10.6%), Communications (9.6%), IT (8.1%) and Energy and Natural Resources (8%).

By number of investments, the IT sector ranked first (41.4% of total investee companies), followed by Consumer Goods (8.2%), Healthcare (7.9%) and Biotechnology / Life Sciences (5.8%).

A very active middle market

The middle market (transactions between €10M and €100M) continues its return to pre-crisis levels (€1,238.5M; 38% of total annual investment), although investment by volume and number of investments did fall slightly (57 investments in this segment in 2015 totaling €1,638M). Domestic funds stood out, leading 30 of the 49 investments closed during the year. [A list of middle market transactions is provided at the end of this report].

Spain is one of the most attractive Venture Capital markets in Europe

Venture Capital is gaining strength, with total investments in excess of €402.8M in 469 investments (390 companies) evenly distributed, by volume, between international and domestic funds (56% and 44%, respectively), although by number of investments, private domestic funds accounted for 70%. [A list of the most significant Venture Capital transactions is provided at the end of this report] The number of new players in this investment segment continues to grow, and each year between 20 and 30 new international funds choose Spanish start ups for their first investment here. As at the end of 2016, 109 of the 149 international entities with Spanish portfolio companies were Venture Capital firms. At the national level, the Venture Capital sector had 78 domestic funds, 12 of which were public.

Key Performance Indicators

Fundraising Investment Divestment

Fundraising DivestmentInvestment

20162014 201520122011 201320100

2,000

1,000

20162014 201520122011 201320100

4,000

3,000

2,000

1,000

20162014 201520122011 201320100

5,000

4,000

3,000

2,000

1,000

10

Divestments stabilize

After two years of heavy divestment activity, portfolio turnover remains robust, albeit at a slower pace. Divestments (at price cost) exceeded €1,851M (-57.5% from 2015) in a total of 314 transactions. The market continues to offer good divestment conditions: abundant liquidity, industrial investors interested in investing and attractive valuations, although high stock market volatility stunted performance of this divestment method in the second half of the year.

The most commonly used divestment mechanism (by volume at price cost) was Trade Sale (26.3%), followed by Owner’s Buyback (18%), IPOs (14%) and Secondary Buyout (13.5%). [A list of the main investment and divestment transactions is provided at the end of this report]

Outlook 2017

According to the most recent data published by the Bank of Spain, growth projections for Spain are very positive (GDP growth of 2.8%), although a slight downturn in activity is expected in 2018 (2.3%) and 2019 (2.1%). During the first few months of 2017, the economy has performed better than expected, contributing to Spain’s continued position as one of the most active countries among the major developed economies. Projections also anticipate

improvements in other macro variables in 2017: unemployment will continue to fall, closing the year under 17%, although unemployment rates will remain excessively high. Public deficit is expected to remain stable at 3.3%, above thresholds set by the EU. Consumer spending continues to be the main driving force for the economy, which, together with low inflation (2.2% in 2017) and increased export of goods and services, makes business owners more confident about the future of the Spanish economy. We therefore have reason to be optimistic, although we can’t lose sight of the fact that the economy is expected to slow down and that certain reforms and decreases in the public deficit are still necessary.

The Venture Capital and Private Equity sector is consolidating, with a very active middle market, new Private Equity & Venture Capital vehicles, an increasingly strong venture capital segment, and the transformation of Spain into an attractive focus for foreign investors; the outlook for 2017 is good. Spain remains a country of opportunities both for domestic and international investors. The exit of the United Kingdom from the European Union should represent an opportunity for Spain to attract a portion of those investors and businesses that decide to relocate to other EU Member States, due to Spain’s economic situation, legal security and attractive legal and tax framework.

11

12 Fundraising

fund closing) of Black Toro Capital Partners; and Realza Capital II (€75M, first closing) of Realza Capital. Several funds were closed to finance start ups, including Ysios BioFund II Innvierte (€126M, final closing) of Ysios Capital Partners; Kibo Ventures Innvierte Open Future (€71M) of Kibo Venture Partners; Kanoar Ventures (€50M) of K Fund; Bullnet Capital III of Bullnet Gestión (€42M, final closing); BeAble Innvierte KETs Fund (€32M) of Beable Capital; Samaipata I (approx. €35M) of Samaipata Capital Partners; and Swanlaab Giza Innvierte I (€21M) of Swanlaab Venture Factory, as well as several undisclosed capital extensions in Venture Capital & Private Equity vehicles. In 2016, total funds raised by Private Equity GPs totaled €1,702M, whereas Venture Capital GPs totaled €568M.

Significant capital raised by middle market funds through fundraising activities led to growth in “dry powder” available to domestic private entities, totalling approximately €4,085.2M.

Fundraising by private entities gained momentum in 2016 thanks to domestic LPs.

New funds raised by private Private Equity and Venture Capital firms in Spain in 2016 totaled €2,271M, representing an increase of 48.5% from 2015. This figure is the highest on record since the financial crisis, exceeding fundraising in countries like Italy (€1,313M1) and Germany (€2,330M2), albeit far from total new funds raised in France (€14,700M3). Including new funds for public entities4 (€167M), total new funds raised for the sector reach €2,438M (+45% from 2015). The public sector’s commitment through funds of funds (Fond-ICO Global and Innvierte), international investors’ confidence in Spain and this asset class, and the growing interest of domestic LPs are some of the many reasons behind the growth in this variable.

Globally, fundraising conditions improved in 2016, with total funds raised of €347bn (+5% from 2015)5. In particular, new funds raised in Europe totaled €100bn, the highest on record for the 2009-2016 period. A large portion of this amount (€64bn) was directed to large pan-European funds. Political instability and market volatility drove investment interest of LPs in Private Equity and Venture Capital investment vehicles. Likewise, high liquidity from capital returns/gains earned from divestments in investee companies in the sector and high confidence in this asset class explain the strong investment demand by LPs. According to Prequin, 89% of LPs plan to increase their allocations to Venture Capital & Private Equity in the short-term and 94% in the long-term.

New funds raised by domestic private entities were headed by 38 Venture Capital & Private Equity Firms (VC&PEs), compared to 37 that raised new funds in 2015. Middle market vehicles stand out as regards new funds raised by private VC&PEs: Alantra Private Equity Fund (€352M) of Alantra Private Equity; Artá Capital Fund II (€300M) of Artá Capital; Fondo Nazca IV (€275M) of Nazca Capital; MCH Iberian Capital IV (first closing) of MCH Private Equity Investments; Aurica III (€100M, first closing) of Aurica Capital Desarrollo; BTC II (€235M, final

New funds raised by type of entity (GP)

Source: ASCRI / webcapitalriesgo

Domestic private entity Domestic public entity

Both investment and fundraising grew vs. GDP. The relationship between raised and invested funds as a

percentage of GDP6 shows an increase in both variables as compared to 2015. Venture Capital & Private Equity investment climbed 7 percentage points relative to GDP, to 0.32%. The 6-point increase in raised capital brings this variable to 0.22%.

Fundraising and investments as a percentage of GDP

20042005

20062007

20082009

20102011

20122013

20140

0.001

0.002

0.003

0.004

0.005

20162015

Investment in Spain / GDP (%)New funds raised / GDP (%)

Source: INE, ASCRI/webcapitalriesgo

1 Source: AIFI (Italian Association of Private Equity & Venture Capital).2 Source: BVK (German Association of Private Equity & Venture Capital).3 Source: AFIC (French Association of Private Equity & Venture Capital).4 This category includes the capital extensions provided under the General State Budget (both national and regional) aimed at public VC&PEs.5 Source: Prequin.6 According to the National Institute of Statistics (INE), Spain’s gross domestic product grew by 3.2% from 2015.

4,000

3,000

2,000

1,000

0

€ M

illo

ns

20162014201320122011201020092008200720062005 2015

13

As in 2015, funds of funds were the primary investor (LP) in total funds raised by domestic private entities.

As regards capital raised by Spanish private VC&PEs, by type of investor of the funds raised, funds of funds led capital contributions, accounting for 21.7% of the €1,271M raised. Individuals (family office) accounted for 20%, regaining confidence in the sector following the contraction of this source during the crisis years, having contributed €459.9M, the second highest contribution since this sector started. The public sector,7 including FOND-ICO Global8 and Innvierte (investment vehicle for VC&PE funds managed by CDTI), increased contributions from 9.6% in 2015 to 15% in 2016 (€348M).

Pension funds, totaling €97,8M, decreasing contributions of new capital to Spanish entities by 42% from 2015. Domestic pension funds continue to contribute relatively low amounts to Spanish VC&PE vehicles (€34M in 2016) being far from their European counterparts with average annual contributions between 15%-20% of total funds raised.

Insurance companies accounted for 7.7% (€174.9M) of the total.

New funds raised by Spanish private VC&PEs by type of investor (LP) in 2016

Spanish SMEs grew and consolidated its position as the main recipient of capital raised by Spanish private

entities9. While from 2009 to 2013, fundraising for investment in start ups was the main driver of Venture Capital activity, in 2014-2016 domestic middle market funds renewed their funds for investments over the coming years. In 2016, mature companies (MBO/MBI) accounted for 38% of intended application (€870M). Growth companies accounted for the second highest application of new funds raised (€709M, i.e. 31% of total). Finally, capital for seed, start up and late stage ventures totaled €528M (23% of total), a historic high since statistics on the sector are being recorded.

Intended application of new funds raised by Spanish private VC&PEs

Source: ASCRI / webcapitalriesgo

2016 2015

0% 20% 40% 60%

Early Stages(seed + start up +

late stage venture)

Growth Capital

Leveraged Buyouts

Other

7 This category includes public funding aimed at funds raised by domestic private entities.8 In 2016, FOND ICO Global contributed €151M to domestic VC&PE vehicles. Funds allocated to international vehicles should be added to this figure. FOND ICO Global, through seven calls (up to December

2016), has agreed to total commitments of €947M since launch, enabling the 39 selected funds, 12 of which were international funds, to invest around €3,800M in Spanish companies.9 This data is developed based on the answers provided by those entities that responded to the question “Intended application of new funds raised” on the survay.

Oth

ers

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GPs

Fina

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Acad

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ns

Pens

ion

fund

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35%

30%

25%

20%

15%

10%

5%

0%

6% 5%3%3% 3%2% 3%

9%

5%1%

19%

23%

32%

17% 17%15%16%

2%

17%

1,8%

Source: ASCRI / webcapitalriesgo

Private Equity fundsVenture Capital funds

Domestic LPs are the main contributors of new funds in the sector. Spain stands out as regards geographic origin of

contributions to Spanish private VC&PEs in 2016, representing 61.9% of funds invested. In absolute terms, volume invested by domestic LPs grew by 158% from 2015, whereas international investors essentially maintained their commitment to Spanish private VC&PEs (€866M) as compared to the previous year, reflecting their interest in the Spanish market and renewed confidence in the national economy. Specifically, 25.6% arose in Europe (Luxembourg, Switzerland, the Netherlands, Denmark and France stand out in particular), followed by the United States with 5%.

New funds raised by Spanish private VC&PEs by geographic break-down of investor (LP) in 2016

500450400350300250200150

500

100

166

46 64 71

1029

463

7699

429

31

349

6434

€ M

illo

ns

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Acad

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Foun

datio

ns

Pens

ion

fund

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44

188

110

Source: ASCRI / webcapitalriesgo

Domestic LPsInternational LPs

14

The investment of international funds in the large market boosted the amount of leveraged transactions,

representing 60% of total investments. Domestic entities focused their investment activity on capital growth and venture capital.

In terms of volume, investment was concentrated in leveraged transactions (€2,174, 60% of total), followed by growth capital (€752M, 20% of total).

Growth in leveraged investments was supported by the number of large transactions in 2016, primarily buy outs led by international funds. In particular, these funds invested a total of €1,870.9M in buy outs in 2016, compared to €769M in 2015. On the other hand, and despite normalization of bank lending and growth of alternative financing, domestic Private Equity funds decreased investments in LBOs (€303M invested compared to €584.7M in 2015). The total number of buy outs decreased slightly from 38 in 2015 to 34 in 2016. Participation of domestic and international GPs in the funding of growth in more mature companies (growth capital) was similar: €389.5M from domestic entities and €363.4M from international funds, distributed across 85 investments. A majority of the investments in growth capital were carried out by domestic entities (72 investments). [A list of the main growth capital and buy out investments is provided in Table 27, page 28].

Investment in Venture Capital (469 investments) ranked first

Large transactions1 drive investment volume in the second half of the year.

Whereas investment volumes in 2015 were lower than expected, although with positive performance in Venture Capital and Middle Market segments, 2016 has been marked by a mature sector showing considerable resiliency to the political uncertainty of 2016. Investment in Venture Capital & Private Equity2 in Spain in 2016 totaled €3,619.7M, representing a 33.6% increase from 2015 (€2,709.6M), the third best figure on record following 2005 and 2007. 92% of investments were allocated to new investments, compared to 8% in follow ons. Economic recovery, easier access to loans, investor appetite and ample capital resources for investment have undoubtedly contributed to this year’s performance, and in particular to the concentration of 73% of investment volume in the second half of the year.

International GPs3 contributed 72% (€2,601M) of total annual investment in 2016, and investment volume grew 53.4% from 2015 (€1,696M). Over half of these investments (54%) were equity investments for over €100M, totaling 9 transactions in 8 companies in 2016. As in previous years, presence of international GPs in Spain, that supplement the activity of local funds, was again extremely relevant not only in large Private Equity transactions, but also in Venture Capital, in particular in late stage ventures4. As at the end of the fiscal year, international funds had closed a total of 82 investments, the second best on record after 2015 (96 investments5).

Domestic private GPs invested a total of €958M (+5.7% from 2015) across 397 investments (+9 from 2015). Recovery of domestic fundraising and therefore of funds available for investment together with an industrial fabric that has recovered from the crisis continue to drive investment by these GPs. To the contrary, public GPs

Investment by type of entity (GP)

Source: ASCRI / webcapitalriesgo

International GP Domestic private GP Domestic public GP Number of investments

5,000

4,000

3,000

2,000

1,000

0

€ M

illo

ns

201620152014201320122011201020092008200720062005

maintained modest direct investment levels, and in 2016 investment remained below €60M (-44% YoY), allocated to 124 investments (-6% from 2015). Likewise, the public sector continued supporting Venture Capital and Private Equity through its investment activity (as LP) both in Private Equity and Venture Capital vehicles, as further explained in the chapter on fundraising of this report.

A comparison between the two main segments of this sector shows that Private Equity investment totaled €3,216.8M across 134 investments and Venture Capital totaled €402.8M across 469 investments.

Regarding the number of investments in 2016, a total of 603 were recorded in 510 companies. 64% of investments recorded were new investments (compared to 36% in expansions of previous investments), a proportion which has remained stable since 2011.

Investment

1 Investments in equity above €100M.2 In Spanish, the term Capital Riesgo is now referred to as Capital Privado, and includes both Venture Capital and Private Equity. For the sake of consistency between our methodologies and those followed

by other National Venture Capital and Private Equity Associations in Europe, the investment figures contained in this report refer to investments made by domestic (public and private) and international GPs in Spanish companies, thus excluding investments by Spanish GPs abroad, which totaled €578M across 84 investments in 2016. This is a change from the methodology previously used to prepare statistics.

3 In this chapter we use indistinctly the term fund, entity, GP and Venture Capital and Private Equity Firm (VC&PE) to refer to Venture Capital and Private Equity operators.4 Late Stage: investment by Venture Capital funds in growth companies with sales and positive EBITDA.5 The number of investments as published in this report is calculated from the investor perspective, meaning that some investee companies may be double counted in the case of syndicated investments.6 Other Early Stage: Refers to follow-on rounds or Series B/C investments in startups

by number of investee companies, similar to 2015. Capital flows were directed to some 198 start ups, followed by other early stage (126). For a detailed analysis of investments in the seed, start up, other early stage6 and late stage venture stages see Chapter 6, on Venture Capital.

The remaining investee companies belong to the late stage venture (50 investments), seed (95), other (9) and replacement (34) categories.

Stage distribution of Venture Capital & Private Equity investments

4,000

3,000

2,000

1,000

0

€ M

illo

ns

2011 2012 2013 2014 2015 2016

Source: ASCRI / webcapitalriesgo

Seed Growth Start-up + other early stages LBO/MBO/MBI/LBU Later stage venture Others

15

Madrid and the Balearic Islands stood out as the main recipients of Venture Capital & Private Equity investment.

As far as the Autonomous Communities, Madrid stood out, with 32.9% of total investment in Spain, followed by the Balearic Islands (19.8%) and Catalonia (14%). In the case of Madrid, the investments in Cabify, Tinsa, Masmovil, Telepizza, Ingesport, Grupo Vips, Jobandtalent, Vitaldent, Konecta and Kiwoko were crucial. In the Balearic Islands, the Hotelbed, Habitissimo and Travel Compositor transactions stood out, as well as the Invent Farma, Go Fruselva, Agromillora, Torrot - Gas Gas, Stat Diagnóstica and Deltalab transactions in Catalonia. Galicia (7.4%) and the Autonomous Community of Valencia (6.3%) saw significant growth in terms of volume due to large transactions involving companies headquartered in these regions, including Cupa Group and Discefa (Galicia) and Ingenomix, Martín Navarro and Royo Group (Comm. of Valencia).

As regards number of investments by region, Catalonia topped the ranking with 182 investments, followed by Madrid (117), the Basque Country (58) and Galicia (57). It is worth highlighting the 12 investments recorded in Andalusian companies, as this region had consistently attracted investments in over 100 companies each year since 2006.

Source: ASCRI / webcapitalriesgo

Investments by sector (2016)

10%0% 5% 20%15% 25% 30%

Energy / Natural resources

Industrial Products & Services

Computer related

Communications

Chemistry & Materials

Construction

Leisure

Others services

Others

Medical / Helthcare

Biotechnology

Financial Services

Consumer related products

Investment by region (2016)

Source: ASCRI / webcapitalriesgo

7.4%1.2% 2.4%

1%

0%14.2%0.6%

0.1%6.4%

32,9%

6.3%

1.4%1.5%

19.8%

0%

4.8%

0%

Source: ASCRI / webcapitalriesgo

Investment by size of company (number of investments) in 2016

Venture Capital Private Equity

Venture Capital and Private Equity activity in Spain primarily focused on financing SMEs. Investments in SMEs are

dominating the Spanish Venture Capital & Private Equity market. Of the 603 investments made in Spain in 2016, 430 were made in SMEs with less than 100 employees.

According to transaction size, of the 603 investments, nearly half (45%) received contributions of less than €250,000, 71% received less than €1 million, 16% €1-5 million, 2.8% €5-10 million, 4.4% €10-25 million and 3.6% €25-100 million. The rest (1.4%) relates to transactions of more than 100 million.

The average amount invested per company increased to €6M (the average in 2015 was €4.7M). 0%

20%

40%

60%

80%

100%

0 to 99 employees

100 to 199 employees

200 to 499 employees

More than 500 employees

The Leisure sector was the primary recipient of Venture Capital and Private Equity financing, and the IT sector

received the highest number of investments. Regarding sectors, Leisure received 25.7% of funds invested (in transactions including Hotelbeds, Ingesport, Telepizza and Grupo Vips), followed by Consumer Products (10.6%), in transactions including Ramón Sabater, Kiwoko, Discefa, Go Fruselva, Arenal Perfumerías and Martínavarro. These were followed by Communications (9.6%), in transactions including Masmovil and Unitronics Comunicaciones; IT (8.1%), including companies such as Cabify, Jobandtalent, Userzoom Technologies and Corner Job; and Energy (8%), with transactions including Renovalia Energy and Soria District Heating.

By number of companies, the IT sector ranked first (41.4% of total investee companies), followed by Consumer Products (8.2%), Healthcare (7.9%) and Biotechnology / Life Sciences (5.8%).

16

The Spanish middle market remained active in 2016, although total investment volume fell by 20% from 2015. Despite this decrease, midmarket investments (equity

investments between €10 and 100 million) maintained pre-crisis levels both in terms of volume and number of investments. Total amount invested in this market segment was €1,238.5M (compared to €1,543.5M in 2015) across 49 investments (51 in 2015), well above 2013 (€332M) and 2014 (€573M) levels. The middle market represented 34% of total Venture Capital and Private Equity investment in Spain (€3,619M), and 89.8% of invested capital was applied to new investments.

Domestic GPs invested a total of €717M (-8% from 2015) in middle market transactions across 30 investments. On the other hand, international GPs contributed €521M (-32% from 2015) across 19 investments (same as in 2015).

In 2016, as compared to 2015, more transactions were completed in the €25M-75M investment range and less in the €50M-100M range. International midmarket GPs focused primarily on buy out transactions, while domestic midmarket GPs concentrated their investments in growth capital and buy outs.

The middle market in Spain, in general terms, is doing well: a great number of Spanish sectors are fragmented, which presents great buy & build opportunities that several GPs are taking advantage of. An offer of interesting assets with growing valuations, albeit far from valuation levels in other countries, significant liquidity most GPs operating in this investment segment managed to raise funds over the past three years and increased availability of debt should pave the way for growth in this segment over the coming years.

Source: ASCRI / webcapitalriesgo

Stage distribution of investment in middle market

2,000

1,000

0

€ M

illo

ns

2015 2016

Middle Market

Middle market investments by size of investment

Source: ASCRI / webcapitalriesgo

2015 2016

600

400

200

0

€ M

illo

ns

10 to 25 25 to 50 50 to 75 75 to 100

Investment in LBOs continues to stand out. The availability of bank loans in 2015 and 2016 has driven the increase in LBOs, rising from 9 in 2014 to 24 in 2015, and to 22 in 2016, totaling

€624M in 2016 (€268M in 2014; €839M in 2015).

The middle market has also made 14 investments in Growth Capital, totaling €286M, and 2 investments in Late Stage Ventures, totaling €47M, both headed by international GPs. Lower midmarket investments in Venture Capital (7 in 2015 compared to 2 in 2016) explains in part the decreased investment in this segment in 2016.

[A list of the main Venture Capital, Growth Capital and Buy Out transactions is provided in Table 24, page 25].

As regards sectors, the middle market has historically focused on traditional industries. The Consumer Products sector received the highest investment volume (€338M; 27.3% of total), followed by the Leisure (€236M; 19%) and Industrial Products and Services (€168M; 13.6%) sectors.

The following stand out in the sector distribution by number of investments: IT (10), Healthcare (8), Industrial Products and Services (7) and Consumer Products (7).

Seed Growth Start-up + other early stages LBO/MBO/MBI/LBU Later stage venture Others

17

International funds led the large market in Spain. Although political uncertainty at the end of 2015 and beginning of 2016

slowed international investor appetite, once the political situation cleared up, international investors returned in full force. The market for large transactions (>€100M in equity) –also known as megadeals– was again headed exclusively by international investors in 2016, following the trend of previous years. In 2016, only 9 international investors headed the 9 large transactions in 8 companies, representing 54% (€1,959M) of total amount invested – Cinven and CPPIB PE (Hotelbeds), Providence Equity (MásMovil), Cinven (Tinsa), ICG (Garnica), Apax Partners (Invent Farma), The Carlyle Group (Cupa Group), Cerberus (Renovalia Energy) and KKR (Telepizza). In 2015, 5 megadeals were carried out totaling €755M (28% of total amount invested in 2015), headed by 5 international investors.

Buy outs led in international funds’ portfolios. Investment of international Venture Capital and Private Equity funds in

Spain has been traditionally directed at consolidated companies, as evidenced by the composition of these funds’ portfolios: 69% of volume is invested in consolidated companies through buyout transactions, 12% in growth companies and 19% in startups and other early stages.

As regards sectors, interest in large companies with activity in the following sectors stands out: Consumer Goods (15.6%), Industrial Products and Services (12%), Healthcare (11.6%) and IT (10.3%).

Portfolio of international entities by sectoral distribution (by volume)

Source: ASCRI / webcapitalriesgo

Investments by international entities in Spain (by size of investment)

2014 20162015201320122011201020092008200720062005

0

1,000

2,000

3,000

4,000

€ M

illo

ns

Nº

Inve

stm

ents

0

2

6

4

8

10

12

1412

11

5 5 5 5

6

7

7

9

3

0

Investments > 100M€ Investments< 100M€ Nº Investments > 100M€

Number of international entities investing in Spain (by size of funds managed)2

Large GPs Medium GPs Small GPs

2014 20162015201320122011201020092008200720062005

Nº

of

Enti

ties

020406080

100

140160

120

180

132

157

9884

6153

4641342925

18

Computer Related 11.9%

Communications 6.5%

Leisure 11.5%

Other Services 17.5%

ConsumerRelated 16.0%

Energy / Natural Resources 5.9%

Medical / Healthcare 12.1%

Industrial Products & Services 11.2%

Investment of international funds in Spain saw strong growth in 2016. In 2016, international funds invested

€2,601M (compared to €1,696M in 2015) in Spain, €1,959M (54%) of which were megadeals, €521M (14%) in midmarket transactions (equity between €10M and €100M), and the rest, €121M, in transactions for less than €10M in equity. The number of companies invested in by international funds has been increasing over the past few years: In 2013, these funds closed a total of 46 investments in companies, 64 in 2014 and 96 (all-time high) in 2015, and 82 investments were closed in 2016, 60 of which were new investments and 22 in expansions. Investment in buy outs stands out (22 investments in 2016 compared to 10 in 2015).

The number of international VC&PEs with activity in the Spanish market increased from 18 in 2005 to 61 in 2012, with 37 new international funds starting investment activity in Spain in 2016, bringing the total to 157.1

DEALS CLOSED IN THE LARGE MARKET IN SPAIN

2013 2014 2015

Triton Partners (Befesa Medio Ambiente), General Atlantic and Warburg Pincus (Santander Asset Management), Doughty Hanson (Centro Médico Teknon) and Bridgepoint (Dorna Sports)

CVC (Grupo Hospitalario Quirón and Deóleo), Eurazeo (Desigual), Cinven (Ufinet), KKR (Grupo Alfonso Gallardo, Port Aventura and Telepizza), Arclight Capital (Bizkaia Energía), Investindustrial (Goldcar), Alquemy (Endeka Ceramics) and Partners Group (Savera)

Apax Partners (Idealista), L Capital Asia (Pepe Jeans), PAI (Geriatros) and Partners Group (Joyería Tous) and an undisclosed transaction

Large Market. The International Investor

1 A list of the international entities with activity in Spain is provided at the end of this report.2 Large: manage or advise on more than €150 million. Medium: manage or advise on between €50-150 million. Small: manage or advise on less than €50 million.

18 Divestment

Divestments by exit route in 2016

Source: ASCRI / webcapitalriesgo

Divestment by type of entity (GP)

Source: ASCRI / webcapitalriesgo

International entityDomestic private entityDomestic public entity

Divestments stabilize after two years of record highs. Although the financial crisis delayed the exit of large

investments closed between 2005-2008, a change in the cycle marked by a favorable environment (investor appetite, liquidity of industrial buyers and funders, attractive valuations for sellers) led to record highs in divestment in 2014 (€4,539.7M) and 2015 (€4,359M), not only in Spain but worldwide.

In 2016, divestments (at price cost) for all Venture Capital and Private Equity firms1 totaled €1,851 million (-57.5% from 2015) across 314 divestments, as compared to 458 in 2015. This downturn was seen worldwide.

By type of entity, highest divestment volumes were led by international funds (€1,059M in 33 divestments). On the other hand, private domestic funds accounted for total divestments of €754M in 154 divestments, and public domestic funds completed 127 divestments totaling (at price cost) €37.5M.

The sector with the highest divestment levels in 2016 was “IT” (65 exits), followed by Industrial Products and Services (42) and Leisure (40). The sectors with the highest divestment volumes (at price cost) were “Products and Services” with €477.4M, followed by Leisure (€337M) and IT (€207M).

In 2016, average holding period of investments increased to 7 years, the highest recorded since the collection of statistics on the sector began.

Some of the main divestments[1] in 2016 were made by Advent International in Tinsa; Corpfin Capita l in Kiwoko, Catai and

The main divestment mechanism used in 2016, by divestment volume, was Trade Sale (26.3%), albeit to a

lower extent than in previous years, followed by Others (21%), Owner’s Buyback (18%), IPOs (14%) and Secondary Buyout (13.5%).

Write-offs fell by 83.6% from 2015 (€63.8M in 31 divestments) and sit at a record low since the crisis began. By number of transactions, the primary divestment method was Loan Repayment (35%) followed by Owner’s Buyback (21.7%) and Trade Sale (20%).

1 The divestment activity covered in this section refers to all domestic (public and private) and international Venture Capital and Private Equity firms that have divested in companies headquartered in Spain.[1] A list of the main divestment transactions is provided on page 30 of this report.

Ingesport; Bridgepoint in Borawind; The Carlyle Group in Applus+; the Private Equity Fund of Goldman Sachs in Grupo Vips; Portobello Capital in Multiasistencia; Nazca Capital in Grupo IMO; Nauta Capital VC Partners, General Atlantic, Index Ventures, Highland Capital Partners, Caixa Capital Risc and Insight Venture Partners in Privalia; Active Venture Partners and Seaya Ventures in Restalo; and Nauta Capital VC Partners, Elaia Partners and Neotec in Agnitio.

5,000

4,000

3,0003,500

4,500

2,0002,500

1,0001,500

5000

€ M

illo

ns

2015 2016201420132012201120102009200820072005 2006

Others 21%

Trade sale

26%

Stock Market 14%

Writte offs3%

Repayment of loans4%

OwnersBuyback

18%

Sale to PE&VCs

14%

19

Venture Capital and Private Equity portfolio companies employ a total of 331,000 persons. The average

investment at price cost of the domestic and international VC&PEs in each portfolio company was estimated at €7.9M at the end of 2016, rising to €10.1M if the investments of several operators are grouped in the same firm. The decrease compared to the prior year can be explained by the sale of portfolio companies that accumulated elevated investments. This change is particularly noticeable when looking at the difference between average investment per company of international VC&PEs at the end of 2016 (approx. €65.1M) and the amount recorded just a year before (€50.5M). Average investment of domestic entities totaled €3.34M.

The average length of time that firms remain in the portfolio of domestic and international VC&PEs, after subtracting syndicated investments, was estimated at 4.6 years.

With the 297 additional investee companies in 2016, the historic portfolio of the firms backed by domestic and international VC&PEs since 1972 is estimated at 6,804 companies. Firms backed by CDTI and Enisa that have not yet received Venture Capital/Private Equity should be added to this figure.

In aggregate employment terms, the outstanding portfolio of the domestic and international VC&PEs totaled 331,000 employees, compared to 417,000 in 2015, with an average of 148 employees per company. Employment in the portfolio companies of CDTI, Enisa and/or other regional organizations added another 45,000 at the end of 2016. Employment in new investee companies in 2016 was estimated at 38,100 workers, with an average of 128 workers for each new company added.

The Venture Capital and Private Equity sector has a total of 2,759 investee companies valued at €20,329M. The

portfolio, at price cost, of the Venture Capital and Private Equity firms (hereinafter, VC&PEs) operating in Spain totaled €20,329M as of 31 December 2016. This includes the investee companies of 131 domestic entities and 149 international entities, 57 of which have on-going activity in Spain. Portfolio value increased again following the stabilization of divestments after two years of record highs. International VC&PEs accounted for 57.9%, private domestic VC&PEs for 31.9% and public ones for 10.2%. This amount does not include an outstanding cumulative portfolio of €517M in loans from CDTI, Enisa and other regional organizations througth participative loans.

The portfolio of investees for the aforementioned domestic and international Venture Capital & Private Equity operators as a whole totaled 2,517 companies at the end of 2015. After excluding the investments syndicated between several operators, the total portfolio was estimated to consist of 2,129 companies. 3,709 companies backed by CDTI, Enisa and/or a similar regional organization should be added to this figure.

Portfolio

Portfolio at cost by type of entity (GP)

Source: ASCRI / webcapitalriesgo

International entity Domestic private entityDomestic public entity

Impact of Venture Capital & Private Equity in Spain

Employees in portfolio companiesEmployees in initial investmentsCummulative number of investee firms

Source: ASCRI / webcapitalriesgo

2016201520142013201220112010200920082007200620050

5,000

10,000

15,000

20,000

25,000

2014 2015 2016201320122011201020092008200720060

100

200

300

400

500

600

Tho

usa

nd

s o

f em

plo

yees

Nu

mb

er o

f �

rms

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

20 Venture Capital

Venture Capital continues to grow in Spain, in particular in Barcelona and Madrid, making Spain one of the most attractive and promising markets in Europe. This is compounded by the strengthening of various initiatives mentioned in previous reports, including:

• The launch of incubators and accelerators throughout Spain in a wide variety of sectors, directly impacting momentum in start ups.

• The increasing presence of different types of investors (Business Angels, crowdfunding platforms and public financing instruments channeled through shareholder loans) is enriching funding offers in the start-up ecosystem.

• Meanwhile, large corporations –a key element in development of the Venture Capital ecosystem and activity– are taking center stage through the implementation of sector-specific incubators and direct investments, although their role remains limited. The only transaction closed in 2016 for over €100M was made by an international Corporate Venture Capital.

Key Performance indicators in Venture Capital activity

1 A more detailed description of the funds raised by private Spanish managers in 2016 is provided in the chapter of this report on “Fundraising.”

INTRODUCTION

Spain is one of Europe’s most attractive markets for Venture Capital

However, if there was a factor that really drove particularly positive investments in early stage transactions in 2015 and 2016, it was divestments in start ups. These divestments have bolstered confidence in the domestic Venture Capital sector, resulting in more options for raising new funds. Also, an increased number of entrepreneurs with experience and money to invest turned into business angels, sometimes channeling their resources through

new Venture Capital vehicles. Availability of funds in the Venture Capital sector has without a doubt grown over the past few years not only by volume (new funds raised by private domestic Venture Capital managers reached a record high in 2016 (€569M1)), but also in terms of quality, as local teams are now raising their second and third generations of new funds.

Divestment plays a key role in the maturity of the sector

Fundraising Investment Divestment

Fundraising DivestmentInvestment international VC entityInvestment domestic private VC entityInvestment domestic public VC entity

20162015201420130

100

200

300

400

500

600

700

20162015201420130

100

200

300

400

500

600

700

20162015201420130

100

200

300

400

500

21

It is also worth noting that international funds, in a short span of just 4 years, attracted by the maturity of the sector, have become one of the primary actors in the domestic Venture Capital sector. Between 20 and 30 new international funds per year have decided to invest in Spanish start ups for the first time over the past few years. However, none of these funds have opened

offices in Spain and their investments are led by teams located in other European capitals. As at the end of 2015, 109 of the 149 international entities with Spanish portfolio companies were Venture Capital firms. At the national level, the Venture Capital sector had 78 domestic funds,2 12 of which were public.

2 Firms with an investment focus on Venture Capital and that have portfolios in which seed, startup, other early stage and late stage venture account for at least half of the portfolio.3 All of the statistical data on the Venture Capital sector is available on page 23.4 The investment by Rakuten in Cabify (also held by, inter alia, the Spanish fund Seaya Ventures) in 2016 was decisive for Corporate investments.5 A total of 390 companies received investments in 2016, 18 of which were co-invested by domestic and international funds, resulting in an aggregate (by type of investor) of 408 companies.

International Venture Capital funds are showing interest in Spanish start ups

• 2015 was an exceptional year for Venture Capital investment in Spanish start ups thanks to international funds that led several rounds with investment tickets in excess of €10M.

• In 2016, private domestic Venture Capital entities drove early stage investment in Spain both in terms of volume invested and number of companies funded, thanks to the implementation in recent years of new funds and managers.

• The number of start ups funded by Venture Capital in 2016 reached a record high (390), in particular in series A and B funding rounds with investment tranches ranging from €250,000 to €5,000,000 in equity, supporting all sectors (in particular, ICT and Digital by number of start ups invested and Life Sciences by volume of investments received).

• Despite a decrease in the number of large investments closed by international funds in 2016, directly impacting total investment volumes, international funds still maintained their interest in Spanish start ups (investment by volume and number of investments in 2016 was the second best on record).

• Start ups funded by domestic Venture Capital funds (approx. 380) form part of the future investment pipeline of international funds.

MAIN CONCLUSIONS FOR 20163

2016 Domestic International

Corporate VC (Investment) €8,47M €116M4

VC (Investment) €143,6M €112,7

Public VC (Investment) €22M –

Active Investors (2016) 55 33

Invested (€M) €174M €228,7M

No. of Investments 429 40

Start Ups Invested 381 27

Avg. Round (€M) €0,45M €8,4M

Avg. Ticket (€M) Investments €0,4M €5,7M

Summary of VC investment in Spanish start ups in 2016

22

Venture Capital investments remain steady, reaching the second best figure on record. Venture Capital funds (domestic

(55) and international (33)) invested a total of €402.8M in Spanish companies in 2016, a 24.8% decrease from 2015 (€535.8M). This decrease can be explained in part by the fewer number of large funding rounds (>€10M) for start ups, late stage ventures and other early stage that drove investment to record highs in 2015 (9 investments between €10-100M in 2015 compared to 3 in 2016), all of which were carried out by international funds. This decrease in number of large transactions is natural since although the Spanish market is growing, the annual demand for start ups requiring high funding rounds remains low. However, it should also be noted that a Spanish start up has for the first time received an investment in excess of €100M from a single investor.6 International Venture Capital funds continue to focus their investments on Spain, investing €228M (-41% from 2015), representing 56% of total investment, the second best figure on record. These funds made 40 investments in 27 companies.

Private domestic Venture Capital entities drove early stage investment in Spain. On the other hand, private domestic

Venture Capital funds in particular increased investment in Spanish start ups, totaling €174M (+18% from 2015; €147M invested in 2015) across 429 investments7 in some 381 companies. Forecasts for the coming years remain positive, including a supply of start ups that is increasingly mature and diverse in terms of stages and sectors; local Venture Capital funds with abundant resources and experience; and international investors with a continued eye on Spanish start ups that will start investing, for the first time, without relying on local Venture Capital funds.

Record high in number of start ups receiving Venture Capital funding. EIn 2016, a total of 469 Venture Capital

investments were made in a record-high 390 companies (+13.7% from 2015), of which 230 start ups received Venture Capital funding for the first time (45 more companies than in 2015). Capital injections in 160 companies were used to support

the portfolio (+3.2%). 97% of start ups received investment in rounds ranging from €250,000 to €5,000,000M in equity.

As regards Venture Capital funds that invested capital in new portfolio investments, a total of €309M was invested, compared to €93M in extensions and follow ons in 2016.

The number of start ups receiving early stage investments increased. Start up or series A funding rounds and other early

stage or series B funding rounds stood out not only by investment amount received (€92M and €98M, respectively), but also by number of start ups funded, which reached record highs by number of series A funding rounds (170 companies) and series B funding rounds (94 companies) funded by Venture Capital.

More and more startups in the Spanish ecosystem reaching maturity has contributed to the strengthening of late stage as a decisive category for investment allocation by stages. In particular, approximately 50% of total investment was represented by late stage investments, which was the only stage, together with seed capital (€15.7M), that maintained similar investment volumes compared to 2015, thanks to the investment in Cabify.

Funding of the technology transfer continues to be the greatest concern. Over the last two years, Innvierte and Fond ICO Global have created specific programs to drive the creation of Venture Capital funds focused on filling this gap, resulting in 86 companies in the seed stage receiving funding in 2016, the highest figure in the last 4 years.

Funds managed by private Venture Capital firms led investment. By type of entity, investment activity was primarily

carried out by private entities, totaling €380.8M in investments in 2016 (94% of total volume invested), as compared to €22M in investments by public funds (5%).

The role of the public sector as an investor in start ups through Venture Capital funds and the decrease in direct investment activity were once again seen this year. This is based on lower investment budgets that started at the beginning of the crisis and a change in financing instruments used, which are increasingly focused on specific shareholder loan programs. Their role as an indirect investor in Venture Capital funds also continues to hold

significant weight among the LPs comprising the VC&PE vehicles. In particular, the FOND ICO Global (managed by Axis), Innvierte (managed by CDTI) and ICF programs contributed close to €100M in Venture Capital vehicles in 2016.

In 2016, the most active private domestic investors (by number of investments) were: Caixa Capital Risc, Inveready Technology Investment Group, Nauta Capital and Kibo Ventures. In the public sector: Gestión Capital Riesgo País Vasco, Seed Capital Bizkaia, Vigo Activo, Sodena and Xesgalicia.9

VENTURE CAPITAL ACTIVITY IN 2016

6 Investment by Rakuten in Cabify7 The number of investments published in this report is calculated from the perspective of the funds, meaning that some investee companies may be double counted in the case of syndicated investments.8 Of these 381 companies, 18 companies received co-investments from domestic and international funds.9 See page 29 of this report for a list of some of the venture capital investments closed in 2016 in Spain

23

Venture Capital support increases across all sectors. In 2016, the number of start ups receiving Venture Capital

funding increased across all sectors of the Spanish economy. In particular, a total of €286M was invested in 221 companies in the ICT and Digital sector. International funds stood out as contributing more than 86% of their investments (€197M) to IT start ups. Investment in the industrial sector remained stable from 2015 (€60M), although it is worth emphasizing that more than 110 companies were funded (highest number in 4 years). In 2015 and 2016, the Life Sciences sector attracted several international funds and corporate ventures, resulting in the sector receiving a total of €57.9M in 2016, in 56 start ups, a record high for both variables. In only four years, the average round in the Life Sciences sector has doubled from €500,000 in 2012 to €1 million in 2016.

Barcelona and Madrid Venture Capital hubs. With a total of €125M in investments in Catalan start ups and €191M in

start ups in Madrid in 2016, these two regions continue to position themselves as innovation and entrepreneurship hubs, standing out for the concentration of Venture Capital funds and start ups, as well as for holding events and creating start up communities that

have without a doubt contributed to the development of early stage investments. In distant second was Castile and León (€22M in investments in the region), followed by the Basque Country (€12.5M) and Galicia (€11M). Catalonia also led by number of start ups funded (102 start ups), followed by Madrid (64), the Basque Country (48) and the Community of Valencia (32).

Venture Capital value creation. Due to the maturity of the sector, successful exits both in terms of volume (measured at

price cost) and quality of the divestment and its impact on the sector have become common in the past two years. The €350M divested across 195 divestments stood out for the following reasons:

1. Write-offs were at an all-time low (€13.5M in 23 divestments).

2. Trade Sale grew as the most significant exit strategy (€202.8M in 34 divestments).

3. Sale to PE&VCs increased from €1.2M in 2012 to €38.7M in 2016 in a relatively similar number of divestments (4 in 2012 and 5 in 2016), showing that the sector is growing.

4. The use of IPOs as a divestment mechanism in the Venture Capital sector should have a higher weighting.

Volume Number of start ups

Venture Capital investment volume by sector

250,000

200,000

150,000

100,000

50,000

0

SeedStartupOther early stagesLate stage venture

2012 2013 2014 2015 13,204

63,397

97,613

24,715

2016 8,578

54,016

73,580

56,854

12,794

53,681

53,245

168,137

17,586

180,272

138,823

199,163

15,775

92,366

98,362

196,321

Seed Startup Other early stages Late stage venture

Tho

usa

nd

s €

180160140120100

80604020

0

Num

ber

SeedStartupOther early stagesLate stage venture

2012 2013 2014 2015 201663

127

81

37

43

151

85

27

51

114

73

33

66

145

92

40

86

170

94

40

Seed Startup Other early stages Late stage venture

Tho

usa

nd

s €

0

100,000

200,000

300,000

400,000

500,000

600,000

Industrial & others63,238 59,517 137,590 106,867

Life Sciences

81,718 58,803 30,940 63,878ICT

Digital 20,124 40,133 88,588 316,884

2012 2013 2014 201558,17658,929

227,86733,759 34,574 30,738 48,215 57,852

2016

Venture Capital Investment by company stage

Source: ASCRI / webcapitalriesgo

Source: ASCRI / webcapitalriesgo

ICT Industrial & others Digital Life Sciences

24

INVESTMENTAmount (€M) Nº Start ups

TYPE OF GP 2012 2013 2014 2015 2016 2012 2013 2014 2015 2016Internacional VC 39.0 57.1 153.8 388.6 228.7 9 31 36 70 40

Domestic Private VC 112.2 101.6 112.5 120.2 152.1 263 261 260 293 324

Domestic Public VC 47.8 34.4 21.5 27.0 22.0 73 68 54 107 105

TOTAL 198.9 193.0 287.9 535.8 402.8 345* 360* 350* 470* 469*STAGE OF DEVELOPMENTSeed 13.2 8.6 12.8 17.6 15.8 63 43 51 66 86

Start-up 63.4 54.0 53.7 180.3 92.4 127 151 114 145 170

Other early stage 97.6 73.6 53.2 138.8 98.4 81 85 73 92 94Later stage venture 24.7 56.9 168.1 199.2 196.3 37 27 33 40 40

TOTAL 198.9 193.0 287.9 535.8 402.8 308 306 271 343 390SIZE0 - 0,25 €M 19.7 19.7 15.8 22.6 21.0 180 147 150 210 2180,25 - 0,5 €M 16.8 16.2 16.8 16.3 23.7 54 68 33 33 470,5 - 1 €M 22.4 31.7 41.9 44.6 40.2 36 49 35 41 561 - 2,5 €M 47.5 56.3 57.7 80.6 87.2 26 24 37 30 472,5 - 5 €M 31.3 39.6 19.5 65.3 47.0 7 12 5 12 125 - 10 €M 46.8 29.5 52.1 39.6 22.8 2 5 6 4 410 - 25 €M 14.4 0.0 54.0 63.1 20.0 2 1 4 10 425 - 50 €M 0.0 0.0 30.0 114.8 37.5 1 0 0 1 150 - 75 M€ 0.0 0.0 0.0 0.0 0.0 0 0 0 0 075 - 100 M€ 0.0 0.0 0.0 89.1 0.0 0 0 1 1 0More than 100 €M 0.0 0.0 0.0 0.0 103.5 0 0 0 1 1

TOTAL 198.9 193.0 287.9 535.8 402.8 308 306 271 343 390INDUSTRYLife Sciences 33.8 34.6 30.7 48.2 57.9 61 55 48 51 56

Digital & Consumer 20.2 40.1 88.6 316.9 227.9 101 110 106 129 142

Industry and others 81.7 58.8 30.9 63.9 58.9 63 72 56 75 113

TIC 63.2 59.5 137.6 106.9 58.2 83 69 61 88 79

TOTAL 198.9 193.0 287.9 535.8 402.8 308 306 271 343 390REGIONSAndalucía 17.7 7.9 4.2 10.6 5.2 28 24 15 18 9

Aragón 1.1 0.3 0.5 0.1 1.1 2 2 2 2 2

Asturias 2.8 3.3 2.9 1.6 2.1 10 16 12 9 12

Baleares 1.1 0.1 2.3 12.3 10.8 2 4 1 4 4

Canarias 0.0 0.0 0.0 0.1 0.0 1 0 1 2 1

Cantabria 0.0 0.4 0.0 0.0 0.0 0 1 0 0 0

Castilla-La Mancha 6.1 12.0 4.8 2.6 1.5 0 5 6 21 3

Castilla-León 0.0 1.8 3.0 4.8 22.0 15 18 13 8 19

Catalonia 51.9 63.5 171.0 327.6 125.8 109 96 87 102 102

Extremadura 3.4 2.0 4.1 8.0 1.7 1 14 11 7 5

Galicia 13.7 11.7 2.6 4.8 11.1 10 10 12 25 47

Madrid 45.2 53.9 65.0 126.5 191.8 53 51 55 69 64

Murcia 3.3 2.0 2.3 0.4 3.9 2 4 3 3 6

Navarra 15.7 13.1 5.7 6.0 8.1 18 15 14 15 33

País Vasco 7.0 5.5 9.0 10.1 12.5 22 17 17 38 48

La Rioja 0.7 0.3 0.0 0.3 0.5 4 1 0 1 3

Comunidad Valenciana 29.1 15.2 10.1 20.1 4.7 31 28 22 19 32

Ceuta/ Melilla 0.0 0.0 0.0 0.0 0.0 0 0 0 0 0

TOTAL 198.9 193.0 287.9 535.8 402.8 308 306 271 343 390*Number investments.

25

DIVESTMENTAmount (€M) Nº divestments

EXIT WAY 2012 2013 2014 2015 2016 2012 2013 2014 2015 2016Owner/manager buy-back 16.5 36.3 40.1 40.1 85.9 36 40 46 37 36

Sale to PE & VCs 1.8 2.2 3.6 11.5 38.7 4 4 6 6 5

Trade sale 69.3 26.6 62.9 305.7 202.8 28 32 24 18 34

Stock Market 0.2 2.7 0.0 0.2 1.4 1 1 0 3 4

Write-offs 54.0 78.5 71.4 30.7 13.5 81 97 60 70 23

Repayment of loans 5.3 10.2 7.9 9.0 5.8 62 40 119 135 79Others 14.1 5.7 8.0 6.3 1.8 36 11 12 14 14

TOTAL 161.2 162.2 193.9 403.4 350.0 248 225 267 283 195STAGE OF DEVELOPMENTSeed 26.7 17.5 31.9 11.3 9.3 99 79 118 117 73

Start-up 96.0 109.0 130.2 61.2 71.6 107 124 114 112 76

Other early stage 18.0 33.2 8.1 18.1 31.1 29 16 19 34 33Later stage venture 20.5 2.6 23.7 312.8 238.0 13 6 16 20 13

TOTAL 161.2 162.2 193.9 403.4 350.0 248 225 267 283 195

FUNDRAISINGAmount (€M)

TYPE OF LP 2013 2014 2015 2016Financial institutions 82.8 65.3 37.9 110.0

Pension funds 9.6 32.8 23.6 15.0

Insurance Companies 2.1 1.0 6.0 16.7

Fund of funds 24.7 2.5 26.1 98.4

Corporate investors 43.3 87.5 40.2 30.5

Family office 19.2 41.8 75.4 179.3

Government agencies 20.4 112.0 82.0 98.3

Academic institutions 0.0 0.0 1.0 0.0

Stock Market 0.0 2.2 0.0 0.0

Others 1.0 7.2 14.1 20.8Capital gains available for re-investment 0.8 6.4 0.0 0.0

TOTAL 203.8 358.8 306.5 569.0

REPO

RT 2

017

2016

MAI

N T

RAN

SACT

ION

S

27

2016 LARGE TRANSACTIONS IN SPAIN WITH EQUITY INVESTMENTS > €100MTARGET PRIVATE EQUITY & VENTURE

CAPITAL FIRMINDUSTRY TYPE OF DEAL TYPE OF FIRM

Hotelbeds Cinven / CPPIB PE Other Services LBO International

Renovalia Energy Cerberus Capital Energy LBO International

Cupira Padesa (Cupa Group)

The Carlyle Group Construction materials LBO International

MasMovil Providence Equity Communications LBO International

Tinsa Cinven Appraisals LBO International

Garnica PlywoodIntermediate Capital Group (ICG)

Construction LBO International

Invent Farma Apax Partners Pharmaceutical group LBO International

Maxi Mobility Spain (Cabify)

Rakuten Internet Late Stage Venture Capital International

Source: ASCRI/webcapitalriesgoNote: Infrastructure, real estate and financial sector not included

2016 MAIN TRANSACTIONS

28

MIDDLE MARKET (PRIVATE EQUITY) DEALS CLOSED AND PUBLISHED IN 2016 TARGET PRIVATE EQUITY FIRM TYPE OF DEAL INDUSTRY TYPE OF FIRM

Igenomix Charme Capital Buy Out Medical instruments International

Fruselva Proa Capital Buy Out Consumer Products National

Carbures Europe Black Toro Capital Growth Industrial Products and Services National

Ramón Sabater Portobello Capital Buy Out Consumer Products National

Caiba Nazca Capital Buy Out Plastics National

Masquepet (Kiwoko) TA Associates Buy Out Consumer Products and Services National

Konecta PAI Partners Build Up Industrial Products and Services International

Martinavarro Miura Private Equity Replacement Consumer Products and Services National

Torrot - Gas Gas Black Toro Capital Growth Consumer Products and Services National

Tenneco Automotive Ibérica

Quantum Capital Partners Buy Out Transport International

Abelan Board Industrial Aurelius Buy Out Industrial Products and Services International

Agromillora Investcorp Buy Out Farming International

Muebles Royo HIG Europe Buy Out Consumer Products and Services National

DiscefaOquendo Capital/ GED Iberian Private Equity

Buy Out Consumer Products and Services National

ITA Clinic Magnum Capital Growth Healthcare National

Arenal Perfumerías Corpfin Capital Growth Consumer Products and Services National

Alianzas en Aceros JZ International Turnaround Industrial Products and Services International

Trison Portobello Capital Buy Out Industrial Products and Services National

Distribuciones Juan Luna Nazca Capital Buy Out Consumer Products and Services National

Tiendas Aurgi GPF Capital Growth Consumer Products and Services National

Grupo Gransolar Diana Capital Growth Energy/Environment National

Jeanología MCH Private Equity Growth Consumer Products and Services National

Unión de Industrias (Unica)

Espiga Equity PartnersMBO / Replacement

Chemistry materials National

Sociedad General Española de Librería, Diarios, Revistas y Publicaciones (SGEL)

Springwater Buy out Logistics International

Palex Medical Corpfin Capital Buy Out Healthcare National

Rotecna Talde Gestión Growth Industrial Services and Products National

Grupo Elastorsa Corpfin Capital Buy Out Chemistry materials National

Reposta Proa Capital Growth Gas Stations National

Deltalab Espiga Equity PartnersMBO / Replacement

Healthcare National

Tekman Books Miura Private Equity Growth Educational programs National

Marypaz Black Toro Capital Growth Consumer Products National

Ingesport Torreal LBO Consumer Products National

Source: ASCRI/webcapitalriesgo

29

SOME OF THE MAIN VENTURE CAPITAL1 INVESTMENTS CLOSED IN 2016TARGET VENTURE CAPITAL FIRM INDUSTRY TYPE OF DEAL TYPE OF FIRM

Maxi Mobility Spain (Cabify) Rakuten InternetLate Stage Venture Capital

International

Job&Talent Atomico, Kibo Ventures Internet Late Stage VentureInternational / National

Stat Diagnostica

Gilde Healthcare, Ysios Capital Partners, Caixa Capital Risc, Boehringer, Kurma Life Sciences, Idinvest Partners, Axis

Biotechnology Late Stage VentureInternational / National

Soria District Heating Suma Capital Energy/Environment Start Up National

Xperience Consulting (User-zoom)

Stepstone Group, TC Growth, Trident Capital

Software Services Late Stage Venture International

Corner Job (Job Digital Networks)

Samaipata Ventures, Bonsai Venture Capital, Sabadell Venture Capital, Antai Ven-ture Builder, Caixa Capital Risc

Internet Late Stage VentureInternational / National

HolaLuz Axon Partners Group Energy Late Stage National

HundredroomsSeaya Ventures, Bankinter Capital Riesgo, Inveready Technology

Internet Other early stage National

4IQ (ant Survela)Trident Cibersecurity, Adara Ventures, Telefónica Ventures

Internet Start upInternational / National

Salupro Bonsai VC, Vitamina K Internet Late Stage National

ABA EnglishKennet Partners, Nauta Capital VC Partners

Internet Other early stage International

iContainers SolutionsSerena Capital, Kibo Ventures, Vitamina K

Internet Other early stageInternational / National

Sherpa Europe Alma Mundi Software Start up National

OlapicFelix Capital, Unilever Ventures, Fung Capital, Longworth Venture Partners

Internet Other early stage International

Aelix TherapeuticsYsios Capital Partners, Caixa Capital Risc, JJDC Inovation

Life Sciences SeedInternational / National

1 Investments closed in Spain by national and international Venture Capital firms.

Source: ASCRI/webcapitalriesgoNote: Deals listed by the amount invested by the Venture Capital firm (minority investors might not appear in this list).

30

PRIVATE EQUITY

PRIVATE EQUITY FIRM DIVESTED COMPANY DIVESTMENT MECHANISM

Torreal Swissport Trade Sales

Bridgepoint Borawind Sale to financial investor

Advent International Tinsa Sale to another Private Equity firm

The Carlyle Group Applus+ Stock Market Post IPO

Permira, KKR Telepizza Stock Market IPO

Goldman Sachs Grupo Vips Sale to another Private Equity firm

Candover Parques Reunidos Stock Market IPO

Portobello Capital Multiasistencia Sale to financial investor

Nazca Capital Grupo IMO Trade Sales

Nazca Capital Agromillora Catalana Sale to another Private Equity firm

Corpfin Capital Catai Trade Sale

MCH Private Equity Nutricafés Trade Sale

Nazca Capital El Granero Integral Trade Sale

MCH Private Equity Europastry Sale to another Private Equity firm

JZ International Docout Sale to financial investor

Corpfin Capital, Prince Capital Kiwoko Sale to another Private Equity firm

Miura Private Equity GH Electrotermia Trade Sale

JZ International Xacom Comunicaciones Sale to financial investor

JZ International Ombuds Sale to financial investor

MCH Private Equity Geroresidencias Trade Sale

Alantra Private Equity High Tech Hoteles Owner/manager buy back

JZ International Oneworld Packaging Sale to financial investor

GED Iberian Private Equity Aleastur Sale to financial investor

MCH Private Equity Geroresidencias Trade Sale

Oquendo Capital Ingesport Sale to another Private Equity firm

Corpfin Capital Ingesport Sale to another Private Equity firm

GED Iberian Private Equity Bio Oils Trade Sale

JZ International Sicame Trade Sale

Aurelius Grupo Tavex Trade Sale

GED Iberian Private Equity Infopress Trade Sale

MAIN DIVESTMENTS 201630

31

VENTURE CAPITAL

VENTURE CAPITAL FIRM DIVESTED COMPANY DIVESTMENT MECHANISM

General Atlantic, Index Ventures, Highland Capital, Insight Venture Partners, Nauta Capital VC Partners, Caixa Capital Risc

Privalia Trade Sale

Nauta Capital VC Partners, Elaia Partners, Neotec

Agnitio Trade Sale

Active Venture Partners, Seaya Ventures Reservas de Restaurantes (Restalo) Trade Sale

Active Venture Parners, Seed Capital de Bizkaia

Ticketbis Trade Sale

Bullnet Capital, CRB Inbervío, Axis Participaciones Empresariales

Oncovisión Trade Sale

Nauta Capital VC Partners Mobile Aware Sale to another VC firm

Grupo Intercom Enalquiler rental online Trade Sale

Qualistas Equity Partners Job&Talent Sale to another VC firm

Avet Ventures Nuroa (antes Migoa) Trade Sale

Sunstone Capital Tyba Trade Sale

THCap Zaption Trade Sale

Caixa Capita Risc, Kibo Ventures Trip4Real Trade Sale

GCRPV Erle Robotics Trade Sale

SRP Asturias Gestión, Solución y Calidad Trade Sale

Grupo Intercom Homeforhome.com Trade Sale

Unirisco, Uninvest Inmunostep Sale to financial investor

Fitalent Spectrapply Trade Sale

Caixa Capital Risc, Clave Mayor Idifarma Desarrollo Farmacéutico Sale to another VC firm

Caixa Capital Risc Signadyne Spain Trade Sale

32

REPO

RT 2

017

STAT

ISTI

CS

33STATISTICS

NEW FUNDS RAISEDAmount (€M)

TYPE OF INVESTOR (GP) 2014 2015 2016

Domestic private entity 2,141.7 1,529.0 2,271.1

Domestic public entity 242.7 152.9 167.1

TOTAL 2,384.4 1,681.9 2,438.3

TYPE OF LPSDOMESTIC PRIVATE ENTITY

Financial institutions 229.7 156.6 211,6

Pension funds 376.2 168.5 97,8

Insurance Companies 141.9 216.7 174,9

Fund of funds 370.7 296.2 491,7

Corporate investors 308.2 123.8 81,4

Family office 133.4 235.1 459,9

Government agencies 460.9 147.2 348,6

Academic institutions 22.3 82.4 30,8

Stock Market 2.2 0.0 13,6

Others 89.7 102.4 361,0

Capital gains available for re-investment 6.4 0.0 0,0

TOTAL 2,141.7 1,529.0 2,271.1

GEOGRAPHIC BREAKDOWN OF TYPE OF LP IN 2016DOMESTIC PRIVATE ENTITY

Domestic LPs International LPs LPs

Financial institutions 165.6 46.0 211.6

Pension funds 184.3 63.6 247.8

Insurance Companies 75.9 99.0 174.9

Fund of funds 29.0 462.7 491.7

Corporate investors 71.3 10.1 81.4

Family office 428.8 31.1 459.9

Government agencies 348.6 0.0 348.6

Academic institutions 0.0 30.8 30.8

Stock Market 0.0 13.6 13.6

Others 101.4 109.6 211

Capital gains available for re-investment 0.0 0.0 0

TOTAL 1,404.8 866.4 2,271.2

34

NEW FUNDS RAISEDAmount (€M)

LOCATION LPDOMESTIC PRIVATE ENTITY

2014 2015 2016

Spain 874.0 543.8 1,404.8

Other European countries 996.4 634.8 581.1

United States 195.6 168.0 121.4

Asia 0.0 76.9 5.4

Canada 0.0 0.0 0.0

Others 75.7 105.5 158.6

TOTAL 2,141.7 1,529.0 2,271.1

INTENDED APPLICATION OF NEW FUND RAISED

DOMESTIC PRIVATE ENTITY 181.9 123.4 0.0

Initial stages: High technology 16.9 55.5 528.3

Initial stages: Non-high technology 140.2 10.0 0.0

Growth: High technology 241.7 395.2 709.3

Growth: No alta tecnología/Expansion: Non-high technology 580.6 584.0 1,237.6

Buy-out: High technology 0.0 0.0 0.0

Buy-out: Non-high technology 1,306.0 801.5 870.1

Others 255.1 143.4 163.5

TOTAL 2,141.7 1,529.0 2,271.1

DRY POWDER

Domestic private entity 2,524.7 2,896.1 4,085.2

Domestic public entity 261.5 278.3 68.6

TOTAL 2,786.2 3,174.3 4,153.8

35

FUNDS UNDER MANAGEMENT1

Amount (€M)

TYPE OF INVESTOR (GP) 2014 2015 2016

Domestic private entity 9,253.2 8,821.7 10,200.1

Domestic public entity 2,083.5 2,168.4 2,046.5

International entity 11,458.3 10,451.5 12,236.7

TOTAL 22,795.1 21,441.5 24,483.4

NUMBER OF ENTITIES

International 98 132 157

Domestic private 110 110 121

Domestic public 17 17 17

TOTAL 225 259 295

International Entity Domestic Entity All Entities

BY SIZE OF FUNDS UNDER MANAGMENT 2015 2016 2015 2016 2015 2016

Large entities (>150 €M) 108 130 25 25 133 155

Medium entities (between 50 and 150 €M) 20 23 35 37 55 60

Small institutions (<50 €M) 4 4 67 76 71 80

TOTAL 132 157 127 138 259 295

1 Due methodological reasons, managed funds are now being obtained from adding the portfolio value at cost and dry powder.

36

INVESTMENT1

Amount (€M)

BY TYPE OF ENTITY (GP) 2014 2015 2016

Internacional VC2 153.8 388.6 228.7

Domestic Private VC 112.5 120.2 152.1

Domestic Public VC 21.5 27.0 22.0

TOTAL 287.9 535.8 402.8Internacional PE3 2.455.2 1.307.4 2.372.7

Domestic Private PE 318.1 785.8 806.0

Domestic Public PE 42.1 80.5 38.2

TOTAL 2.815.4 2.173.7 3.216.9International Entity (VC+PE) 2.609.0 1.696.0 2.601.4

Domestic Private Entity (VC+PE) 430.6 906.0 958.0

Domestic Public Entity (VC + PE) 63.6 107.6 60.2

TOTAL 3.103.3 2.709.6 3.619.7NEW - FOLLOW ONS

New Investments 2.966.0 2.271.5 3.340.6

Follow ons investments 137.3 438.1 279.1

TOTAL 3.103.3 2.709.6 3.619.7STAGE OF DEVELOPMENT

Seed 12.8 17.6 15.8

Startup 53.7 180.3 92.4

Other early stages 53.2 138.9 98.4

Late stage venture 168.1 199.2 196.3

Growth 500.9 310.9 753.0

Replacement 251.7 357.3 129.2

LBO/MBO/MBI/LBU 1.639.0 1.348.7 2.174.1

Others 423.9 156.7 160.7

TOTAL 3.103.3 2.709.6 3.619.7INDUSTRY

Computer related 227.3 659.1 292.7

Other Electronic related 1.6 9.5 2.4

Industrial Products & Services 329.7 215.6 257.9

Consumer-related Products 738.2 521.8 382.4

Agriculture 5.6 93.7 29.5

Energy 184.1 37.0 289.8

Chemistry & Materials 7.7 19.5 180.9

Construction 165.3 20.5 184.8

Health related 387.0 605.4 120.6

Leisure 416.9 35.6 931.8

Communications 270.6 27.4 347.6

Biotechnology 17.2 23.7 201.4

Industrial Automation 0.2 3.2 0.0

Financial Services 0.1 31.4 215.3

Other Services 302.9 293.6 75.9

Others 1.1 90.4 22.6

Transportation 45.5 6.8 49.7

Other Manufacturing 2.4 15.3 34.4

TOTAL 3.103.3 2.709.6 3.619.7

1 The investment figures contained in this report refer to investments made by domestic (public and private) and international GPs in Spanish companies, thus excluding investments by Spanish GPs abroad, which totaled €578M across 84 investments in 2016.

2 Venture Capital3 Private Equity

37

INVESTMENT Amount (€M)

REGION 2014 2015 2016

Madrid 1,209.2 1,005.7 1,189.2

Catalonia 742.2 878.8 515.7

Andalucia 243.4 50.5 53.5

País Vasco 234.4 110.8 86.8

Galicia 15.1 213.1 267.3

Castilla-León 14.0 101.1 23.2

Castilla-La Mancha 5.4 5.2 232.5

Aragón 5.5 39.1 1.6

Extremadura 229.7 21.1 3.7

Canarias 0.1 0.1 0.0

Navarra 9.9 71.0 37.2

Asturias 14.0 2.5 41.9

Comunidad Valenciana 373.3 112.2 228.9

Baleares 4.6 12.3 715.9

Murcia 2.3 0.6 49.9

Cantabria 0.0 0.0 0.0

La Rioja 0.0 85.3 172.4

Ceuta/ Melilla 0.0 0.0 0.0

TOTAL 3,103.3 2,709.6 3,619.7

SIZE OF INVESTMENT

0 - 0,25 € million 17.3 23.2 22.9

0,25 - 0,5 € million 18.7 19.9 30.0

0,5 - 1 € million 47.4 113.1 46.4

1 - 2,5 € million 81.1 47.1 113.6

2,5 - 5 € million 57.5 75.9 83.9

5 -10 € million 88.9 131.9 125.3

10- 25 € million 289.1 448.2 405.2

25 - 50 € million 94.0 301.4 600.3

50 - 75 € million 110.0 363.5 233.0

75 - 100 € million 80.0 430.5 0.0

More than 100 € million 2,219.3 755.0 1,959.1

TOTAL 3,103.3 2,709.6 3,619.7

Between 10 and 100 € million 573.1 1,543.5 1,238.5

COMPANY SIZE PRIVATE EQUITY VENTURE CAPITAL ALL0 to 9 employees 68 82.9 151

10 to 19 employees 337 73.6 410

20 to 99 employees 717 197.5 914

100 to 199 employees 303 44.4 347

200 to 499 employees 367 4.4 371

500 to 999 employees 522 0.0 522

1,000 to 4,999 employees 800 0.0 800

More than 5,000 employees 105 0.0 105

TOTAL 3,217 402.8 3,619.7

38

INVESTMENT Nº Investments

BY TYPE OF ENTITY (GP) 2014 2015 2016

Internacional VC 36 70 40

Domestic Private VC 260 293 324

Domestic Public VC 54 107 105

TOTAL 350 470 469

Internacional PE 28 26 42

Domestic Private PE 50 57 73

Domestic Public PE 16 25 19

TOTAL 94 108 134

International Entity (VC+PE) 64 96 82

Domestic Private Entity (VC+PE) 310 350 397

Domestic Public Entity (VC + PE) 70 132 124

TOTAL 444 578 603

NEW - FOLLOW ONS

New Investments 269 352 386

Follow ons investments 175 226 217

TOTAL 444 578 603

STAGE OF DEVELOPMENT

Seed 58 82 95

Startup 134 181 198

Other early stages 92 117 126

Late stage venture 66 91 50

Expansion 51 47 85

Replacement 7 10 6

LBO/MBO/MBI/LBU 22 38 34

Others 14 12 9

TOTAL 444 578 603

INDUSTRY

Computer related 195 273 250

Other Electronic related 2 6 8

Industrial Products & Services 39 36 35

Consumer-related Products 39 42 50

Agriculture 6 19 18

Energy 10 9 28

Chemistry & Materials 5 8 17

Construction 3 2 7

Health related 26 49 48

Leisure 16 12 30

Communications 17 11 13

Biotechnology 42 48 45

Industrial Automation 2 9 4

Financial Services 1 11 0

Other Services 23 28 17

Others 4 1 7

Transportation 7 1 10

Other Manufacturing 7 13 16

TOTAL 444 578 603

39

INVESTMENT Nº Investments

REGION 2014 2015 2016

Madrid 108 132 117

Catalonia 24 28 182

Andalucía 148 170 12

País Vasco 24 53 58

Galicia 21 51 57

Castilla-León 15 13 23

Castilla-La Mancha 14 24 5

Aragón 3 4 4

Extremadura 14 14 8

Canarias 2 2 1

Navarra 17 23 42

Asturias 20 12 18

Comunidad Valenciana 28 33 45

Baleares 3 12 12

Murcia 3 4 11

Cantabria 0 0 0

La Rioja 0 3 8

Ceuta/ Melilla 0 0 0

TOTAL 444 578 603

SIZE OF INVESTMENT

0 - 0,25 € million 189 274 270

0,25 - 0,5 € million 57 61 87

0,5 - 1 € million 73 72 73

1 - 2,5 € million 57 74 73

2,5 - 5 € million 16 22 25

5 -10 € million 14 19 17

10- 25 € million 22 30 27

25 - 50 € million 3 10 18

50 - 75 € million 2 6 4

75 - 100 € million 1 5 0

More than 100 € million 10 5 9

TOTAL 444 578 603

Between 10 and 100 € million 28 51 49

COMPANY SIZE PRIVATE EQUITY VENTURE CAPITAL ALL0 to 9 employees 17 244 261

10 to 19 employees 23 118 141

20 to 99 employees 39 96 135

100 to 199 employees 17 9 26

200 to 499 employees 18 2 20

500 to 999 employees 11 0 11

1,000 to 4,999 employees 6 0 6

More than 5,000 employees 3 0 3

TOTAL 134 469 603

40

DIVESTMENT Amount (€M)

BY TYPE OF ENTITY (GP) 2014 2015 2016International Entity (VC+PE) 3,299.8 2,695.9 1,059.5Domestic Private Entity (VC+PE) 1,141.2 1,608.7 754.0Domestic Public Entity (VC + PE) 99 55 38

TOTAL 4,539.7 4,359.1 1,851.0

CONCEPTSFinal Divestments 3,867.9 3,768.5 1,390.3Partial Divestments 671.8 590.6 460.7

TOTAL 4,539.7 4,359.1 1,851.0

STAGE OF DEVELOPMENTSeed 31.9 11.3 9.3Start-up 130.2 61.2 71.6Other early stage 8.1 18.1 27.0Later stage venture 0.0 0.0 79.7Expansion 938.3 628.9 496.1

Replacement 103.3 850.4 86.5LBO/MBO/MBI/LBU 3,298.6 2,503.0 1,045.2Otras 29.3 286.2 35.6

TOTAL 4,539.7 4,359.1 1,851.0

EXIT WAY

Owner/manager buy-back 131.2 181.4 337.8Sale to PE & VCs 549.6 243.3 250.5Trade sale 2,828.6 2,211.7 486.8Stock Market 632.0 1,261.0 260.5Write-offs 295.6 389.2 63.8Repayment of loans 67.6 41.6 66.3Others 35.1 30.9 385.4

TOTAL 4,539.7 4,359.1 1,851.0

INDUSTRY

Computer related 138.0 124.4 207.6Other Electronic related 15.0 8.9 0.8Industrial Products & Services 468.1 103.9 477.4Consumer-related Products 157.0 447.5 121.8Agriculture 1.8 7.3 21.2Energy 386.4 701.3 278.2Chemistry & Materials 15.7 21.3 4.3Construction 28.7 41.7 66.4Health related 548.7 127.6 59.8Leisure 311.7 248.5 337.7Communications 1,506.8 763.0 78.2Biotechnology 22.6 11.7 18.3Industrial Automation 1.1 0.4 0.0Financial Services 0.2 590.0 0.5Other Services 738.5 1,117.4 105.3Others 1.7 3.4 2.5Transportation 183.1 36.9 66.9Other Manufacturing 14.8 3.9 4.2

TOTAL 4,539.7 4,359.1 1,851.0

41

DIVESTMENTNº Divestments

BY TYPE OF ENTITY (GP) 2014 2015 2016International Entity (VC+PE) 30 21 33Domestic Private Entity (VC+PE) 158 217 154Domestic Public Entity (VC + PE) 225 220 127

TOTAL 413 458 314

CONCEPTSFinal Divestments 236 252 184Partial Divestments 177 206 130

TOTAL 413 458 314

STAGE OF DEVELOPMENTSeed 118 117 73Start-up 114 112 76Other early stage 19 34 32Later stage venture 0 0 10Expansion 119 126 84Replacement 4 12 10LBO/MBO/MBI/LBU 33 35 23Otras 6 22 6

TOTAL 413 458 314

EXIT WAY

Owner/manager buy-back 74 72 68Sale to PE & VCs 10 16 12Trade sale 68 75 63Stock Market 8 13 8Write-offs 73 80 31Repayment of loans 162 179 110Others 18 23 22

TOTAL 413 458 314

SECTOR

Computer related 74 89 65Other Electronic related 12 13 7Industrial Products & Services 60 52 42Consumer-related Products 27 33 25Agriculture 6 14 7Energy 19 55 14Chemistry & Materials 20 19 16Construction 11 5 9Health related 19 21 31Leisure 26 13 40Communications 25 18 14Biotechnology 41 47 27Industrial Automation 4 8 0Financial Services 1 4 2Other Services 50 45 2Others 4 8 3Transportation 6 6 6Other Manufacturing 8 8 4

TOTAL 413 458 314

42

PORTFOLIO Amount (€M)

BY TYPE OF ENTITY (GP) 2014 2015 2016

International Entity (VC+PE) 11,618.3 10,451.5 12,236.7

Domestic Private Entity (VC+PE) 6,827.5 5,925.6 6,114.9

Domestic Public Entity (VC + PE) 1,822.9 1,890.1 1,977.9

TOTAL 20,268.7 18,267.1 20,329.5

INDUSTRY

Computer related 1,295.8 1,827.4 1,872.6

Other Electronic related 199.8 203.1 201.4

Industrial Products & Services 2,490.8 2,490.7 2,685.0

Consumer-related Products 2,680.5 2,761.5 2,989.5

Agriculture 162.9 247.1 246.3

Energy 2,161.2 1,326.4 1,442.8

Chemistry & Materials 145.1 143.4 315.5

Construction 642.5 626.9 757.2

Health related 1,319.5 1,809.4 1,959.8

Leisure 1,850.9 1,634.7 2,398.0

Communications 1,968.6 1,244.8 1,561.3

Biotechnology 148.3 160.9 339.0

Industrial Automation 6.2 9.2 9.2

Financial Services 686.3 140.9 345.6

Other Services 3,982.3 3,053.6 2,438.4

Others 97.6 183.5 203.2

Transportation 321.1 292.2 432.9

Other Manufacturing 109.2 111.4 131.7

TOTAL 20,268.7 18,267.1 20,329.5

REGION

Madrid 7,497.6 7,245.9 7,783.0

Catalonia 4,308.7 3,859.0 3,909.5

Andalucía 668.2 462.8 427.7

País Vasco 1,483.7 1,214.6 1,279.5

Galicia 817.8 586.1 763.5

Castilla-León 435.7 330.0 295.6

Castilla-La Mancha 178.8 82.3 309.1

Aragón 144.5 164.2 132.3

Extremadura 397.7 397.4 397.0

Canarias 20.1 4.0 3.3

Navarra 369.2 303.8 324.0

Asturias 302.2 147.4 182.4

Comunidad Valenciana 772.0 794.0 975.9

Baleares 22.2 24.7 730.9

Murcia 93.5 83.3 132.9

Cantabria 60.0 57.2 56.0

La Rioja 116.8 127.2 299.7

Ceuta/ Melilla 0.0 0.0 0.0

TOTAL 17,688.9 15,883.9 18,002.3

43

PORTFOLIO Nº Investments

BY TYPE OF ENTITY (GP) 2014 2015 2016

International Entity (VC+PE) 1,332 1,343 1,468

Domestic Private Entity (VC+PE) 903 957 1031

Domestic Public Entity (VC + PE) 162 209 260

TOTAL 2,397 2,509 2,759

INDUSTRY

Computer related 664 782 902

Other Electronic related 33 32 31

Industrial Products & Services 331 323 321

Consumer-related Products 201 209 230

Agriculture 54 61 66

Energy 165 124 144

Chemistry & Materials 52 56 65

Construction 48 49 59

Health related 119 146 157

Leisure 90 89 106

Communications 97 95 96

Biotechnology 175 179 189

Industrial Automation 14 21 21

Financial Services 35 35 35

Other Services 207 202 196

Others 31 27 41

Transportation 36 31 45

Other Manufacturing 45 48 55

TOTAL 2,397 2,509 2,759

REGION

Madrid 325 358 391

Catalonia 495 530 593

Andalucía 212 201 192

País Vasco 187 207 244

Galicia 183 204 238

Castilla-León 83 73 75

Castilla-La Mancha 59 73 72

Aragón 52 38 39

Extremadura 122 122 118

Canarias 11 9 7

Navarra 78 78 89

Asturias 86 90 101

Comunidad Valenciana 109 109 132

Baleares 9 19 24

Murcia 20 18 26

Cantabria 13 11 9

La Rioja 13 10 18

Ceuta/ Melilla 0 0 0

TOTAL 2,057 2,150 2,368

44

TYPE OF INVESTMENT BY REGION (AMOUNT €M)

Seed Start-upOther early

stageLater stage

ventureExpansion Replacement Buyout Other Total

Madrid 4.1 20.8 18.7 148.3 416.9 68.2 404.0 108.3 1,189.2

Catalonia 5.9 29.3 49.6 41.0 134.5 31.0 193.4 31.0 515.7

Andalucía 2.1 1.6 1.5 0.0 48.4 0.0 0.0 0.0 53.5

País Vasco 0.0 9.7 2.4 0.5 74.2 0.0 0.0 0.0 86.8

Galicia 1.2 8.4 1.3 0.2 21.0 0.0 235.2 0.0 267.3

Castilla-León 0.6 11.4 6.7 3.2 1.2 0.0 0.0 0.0 23.2

Castilla-La Mancha 0.0 1.5 0.0 0.0 1.5 0.0 229.5 0.0 232.5

Aragón 0.0 0.1 1.0 0.0 0.5 0.0 0.0 0.0 1.6

Extremadura 0.0 1.7 0.0 0.0 2.0 0.0 0.0 0.0 3.7

Canarias 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

Navarra 0.9 2.3 2.5 2.3 1.3 0.0 26.4 1.4 37.2

Asturias 0.1 1.1 0.1 0.8 13.5 0.0 26.4 0.0 41.9

Comunidad Valenciana 0.9 2.3 1.5 0.0 25.2 30.0 149.0 20.0 228.9

Baleares 0.0 1.8 9.0 0.0 2.3 0.0 702.7 0.0 715.9

Murcia 0.0 0.3 3.6 0.0 6.9 0.0 39.1 0.0 49.9

Cantabria 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

La Rioja 0.0 0.1 0.4 0.0 3.5 0.0 168.4 0.0 172.4

Ceuta/ Melilla 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

Total 15.8 92.4 98.4 196.3 753.0 129.2 2,174.1 160.7 3,619.7

TYPE OF INVESTMENT BY REGION (NUMBER OF INVESTMENTS)

Seed Start-upOther early

stageLater stage

ventureExpansion Replacement Buyout Other Total

Madrid 11 30 22 13 27 2 8 4 117

Catalonia 23 54 47 24 24 3 4 3 182

Andalucía 3 2 3 1 3 0 0 0 12

País Vasco 0 41 9 2 6 0 0 0 58

Galicia 21 25 4 1 1 0 5 0 57

Castilla-León 5 4 7 5 2 0 0 0 23

Castilla-La Mancha 0 3 0 0 1 0 1 0 5

Aragón 0 1 1 0 2 0 0 0 4

Extremadura 0 5 0 0 3 0 0 0 8

Canarias 1 0 0 0 0 0 0 0 1

Navarra 12 10 13 2 3 0 1 1 42

Asturias 2 7 1 2 5 0 1 0 18

Comunidad Valenciana 17 10 7 0 2 1 7 1 45

Baleares 0 2 5 0 2 0 3 0 12

Murcia 0 3 5 0 2 0 1 0 11

Cantabria 0 0 0 0 0 0 0 0 0

La Rioja 0 1 2 0 2 0 3 0 8

Ceuta/ Melilla 0 0 0 0 0 0 0 0 0

Total 95 198 126 50 85 6 34 9 603

TYPE OF INVESTMENT BY REGION IN 2016

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46

1 Regulation (EU) No 345/2013 and No 346/2013 of the European Parliament and of the Council both of 17 April 2013.2 See ESMA reports 2016/1138 and 2016/1140.

The Regulatory Framework in Perspective: Questions under Review

Directive 2011/61/EU, on Alternative Investment Fund Managers (“AIFMD,” hereinafter the “Directive”) entered

into force on July 22, 2011, with a deadline for transposition by the Member States of July 22, 2013. This Directive was transposed into Spanish law by virtue of Law 22/2014 of November 12, which also amended Law 25/2005, governing the former legal framework for private equity.

Despite foreseeable initial concerns regarding the new legal framework, it is safe to say that, in general, the market has been able to easily adapt to the new rules. However, certain inefficiencies requiring correction have become clear, several of which are based on a lack of consistency in application of the regulations by each Member State, and others which are based on mere technical defects in the relevant regulations.

In any event, the Directive already includes specific provisions for its subsequent review and amendment, in relation to which the two main issues pending at this time are, on the one hand, extension of the passport governed by the Directive to third countries and, on the other hand, the implementation of Article 69, which reads as follows: “By 22 July 2017, the Commission shall, on the basis of public consultation and in the light of the discussions with competent authorities, start a review on the application and the scope of this Directive. That review shall analyze the experience acquired in applying this Directive, its impact on investors, funds or managers, both in the Union and in third countries, and the degree to which the objectives of this Directive have been achieved. The Commission shall, if necessary, propose appropriate amendments. The review shall include a general survey of the functioning of the rules in this Directive and the experience acquired in applying them.”

Timely compliance with the July 2017 deadline seems highly unlikely at this time with issues such as the political situation in Europe, and in particular Brexit, giving reason to believe that compliance with this deadline will undoubtedly be delayed.

On the other hand, the regimes applicable to European Venture Capital Funds (“EuVECA”) and European Social Entrepreneurship Funds (“EuSEF”)1 are also under review given the present lack of acceptance of such entities in the market.

The key aspects of some of the main amendments that should be expected to be made in the short and medium-term to current regulations governing alternative investment products are briefly analyzed below.

1.- Alternative Investment Fund Managers Directive

1.1. Third-Country Passports

European fund managers are required to obtain relevant authorization before activating their passport and engaging in cross-border marketing and management within the European Union.

This Directive planned to make passports available to managers and funds from third countries, subject to compliance with certain conditions, but the 2015 date initially set for such purpose was not met and no significant advances have been made since.

In July 2016, the European Securities and Markets Authority (“ESMA”) issued a public recommendation for extension of the passport (albeit with some caution) to twelve countries2: Australia, Bermuda, Canada, Cayman Islands, Guernsey, Hong Kong, Jersey,

Japan, Isle of Man, Singapore, Switzerland, and the United States. However, the final decision rests with the Commission who, for the time being, has not issued a decision. Brexit has had a particular impact in this regard and all signs seem to indicate that the matter will not be resolved until the terms of the UK’s exit from the European Union have been negotiated.

Generally speaking, this rule would have allowed managers from third countries to access the passport, subject to compliance with the conditions set forth in the Directive and to obtaining the relevant authorization. In the meantime, while this procedure is being implemented, third country operators are free to market their products in the EU subject to compliance with the regulations of the relevant Member State (National Private Placement Regimes) (to the extent said regulations still exist as these were de facto replaced in some countries at the time of transposition) and, in all cases, in accordance with certain provisions of the Directive. In fact, this Directive provides for a phasing out of said national regulations once the passport has been made fully accessible by third country managers, although this is not likely to occur until 2019.

It should also be noted that there are no regulatory restrictions preventing funds from investing in Europe or European investors from investing in third country funds at their own initiative if they so wish (reverse solicitation), even where there was no marketing per se. On the other hand, the Directive has no effect whatsoever on investors from third countries who may freely invest in European funds without being affected by this regulation.

The implementation of an effective, simple and flexible system for non-EU operators to access the passport is essential for business. Complying with regulations in each and every one of the Member States where a company intends to market –in many cases requiring compliance with very different requirements and demands–, in addition to registering with ESMA at the European level, can be a very complex and costly process and, therefore, is only possible for a select few. It is a proven fact that many small and medium managers forgo marketing in Europe for this very reason, which prevents European investors from accessing these products and, therefore, reduces their options, thus negatively affecting the profitability of their portfolios.

As already noted, the political pressure generated by Brexit will delay resolution of this issue, as all signs seem to indicate that the European Union hopes to prevent the UK from benefiting from a relaxation in the requirements for passport access by third countries at a time of high tension in negotiations.

1.2. Passport for Managers Falling Below Certain Thresholds

One of the main inefficiencies identified in the market since this Directive entered into force is the difficulty faced by many operators when it comes to cross-border marketing, in particular for those that have assets under management below the thresholds set by the Directive and who are therefore not required to comply with the Directive. Although operators may voluntarily submit to the requirements imposed by the Directive, many small managers have a hard time meeting these requirements. Given that, in such case, they are unable to obtain the passport, they face significant difficulties and are even completely prevented from marketing in certain Member States that directly block these managers, even denying them the option to market in accordance with national regulations.

47

3 See Art. 80.4 of Law 22/2014 and Art. 32.7 of Directive 2011/61/EU.4 See Art. 205 and Art. 206 of Royal Legislative Decree 4/2015 of October 23, approving the amended and restated text of the Spanish Securities Market Act.

These obstacles not only negatively affect market competition in Europe but in practice, contradict the treaties and philosophy of the European Union.

Although some of these managers may be able to operate under the EuVECA framework, the conditions and restrictions under said framework have in practice resulted in most managers discarding this option, as further analyzed below. A potential solution to this problem, which affects a significant number of operators, could include revising the EuVECA framework or establishing a specific passport for smaller managers.

1.3. What is “Marketing”?

Another problem that has been clearly identified by managers, and which is particularly problematic at the start of each fundraising process, is the proper identification and interpretation of the marketing rules applicable in each Member State in which the manager intends to raise funds with a view to complying with all relevant regulatory requirements.

However, the definition of “marketing” in each Member State is not clear, in particular in relation to activities that could be considered “pre-marketing,” thus constituting a preparatory activity outside the scope of the regulations. Some countries consider effective marketing to have taken place only after the investor has received nearly final documents for signing, whereas others take a more conservative approach.

The practical consequence of this situation is that managers are required to spend an inordinate amount of time and money analyzing the regulations of each country, thus suffering numerous delays that negatively affect the fundraising process.

1.4. Regulatory Process for Cross-Border Marketing

In order to market a new fund in a Member State other than their country of incorporation, managers regulated by the Directive (i.e. managers with assets under management above established thresholds) are required to send notice to the competent authority in their country. This notice must include a description of the structure of the relevant fund and a copy of its instrument of incorporation (e.g. primarily the prospectus and regulations for Venture Capital and Private Equity firms). The regulatory authority then has up to twenty days to respond, before which the manager is not allowed to start any marketing activities.

The main problem that this has created is in the case of potential changes and amendments subsequently made to the relevant documents, as the regulations require that any substantial changes to the documents be reported to the supervisory authority, who will have up to one month to review and, as the case may be, approve said documents.3 Throughout the marketing process several negotiations are held with potential investors in the fund that could result in significant changes to the documents, and it is easy to imagine how burdensome these obligations and deadlines could become. In fact, it is completely inefficient that each time new amendments to the terms and conditions of a fund are made a new version has to be sent to the authorities and that, even worse, the fund is required to wait a full month before implementing such changes and, as the case may be, before obtaining the green light to close the fund.

A similar problem surfaces in relation to the so-called side letters signed with certain investors and which are not included in the

primary instrument of incorporation for the fund. This rule requires that all investors be made aware of the existence and content of said side letters. Although this is certainly an excellent practice that ensures total transparency in the process, the problem arises when it comes to compliance with such requirement. The regulation requires that the potential investor have this information prior to effective execution of their investment which, in practice, is not possible in a large majority of cases, as this type of negotiation agreement is reached throughout the process and tends to be made effective at the time of the relevant closings. This makes it impossible to anticipate the existence or content of any subsequent parallel agreements.

1.5. Definition of Professional Investor4

This Directive provides that marketing may only be performed as between professional investors, as defined in MiFID II. However, this reference has turned out to be unsuitable to the business reality.

Many traditional investors are automatically qualified as professional investors under the terms of MiFID based on their nature as an institutional investor, but there are many other investors who despite being just as active on the market have difficulty or, in some cases, are unable to qualify as professional investors. This is the case for example with Family Offices or high net worth individuals which, although having a high level of sophistication and market knowledge, do not meet the criteria set forth in the regulations for being considered professional investors. However, these investors account for an increasingly significant amount of funds on the market and are essential for many managers, making the correction of this regulatory inefficiency a priority. The classification of these types of investors as retail investors makes compliance with marketing regulations in different countries more complicated, if not impossible.

1.6. Additional Issues

Although we have discussed certain aspects that have been identified as priorities in relation to revision of the application and impact of the Directive, additional issues are present which affect, to a greater or lesser extent, proper operation of the market. In a nutshell, the potential inefficiencies identified should be adjusted and corrected, and the appropriate principles of consistency and proportionality in relation to the aims sought by the Directive should be applied.

This includes, inter alia, the principles of compensation, risk control, segregation of duties and alignment of interests; the scope of the Directive and the appropriate treatment of entities such as co-investment vehicles, which are increasingly common and sophisticated; depositaries and the need to grant a passport to service providers that facilitate operations and reduce costs; or the need to harmonize information and reporting principles, to name a few of the most relevant issues.

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2. EuVECA and EuSEF Regimes

Regulations on EuVECA and EuSEF funds were implemented with the aim of improving access to capital for the managers of these funds. However, despite the laudable objective of these regulations, their expected advantages have not materialized, notably: (i) the opportunity to market to retail investors; (ii) less oversight and regulation than alternative management activities governed under the Directive; (iii) automatic marketing without a passport; or (iv) exemption from the obligation to have a depositary.

In December 2016, the revision process was initiated addressing potential amendments to both regimes under the Capital Markets Union (“CMU”) Action Plan,5 one of the priorities of which was, as stated by the European Commission itself, to provide easier access to capital for start-ups, SMEs and, in general, innovative businesses with high growth potential. Comparing the American market with ours, it is clear that a certain degree of support is still required for the proper implementation of alternative financing mechanisms in Europe. On the other hand, the recent financial crisis made the need for these sources when bank financing fails clear. Along these same lines, the above-mentioned CMU Plan includes other initiatives such as the launch of a Pan-European Venture Capital Fund of Funds or the proposal for tax incentives for venture capital and business angels.

Focusing on the regulatory aspects, the Commission has identified three fundamental obstacles to the effective application of the EuVECA and EuSEF regimes. Two of these obstacles are grounded in the content of the regulations: (i) limitations that govern the type of manager that can promote these types of funds; (ii) restrictions on the type of investments that these funds can make; and (iii) the third obstacle, which we consider external to the regulation itself and which is based on the application of fees and levies by various Members States for cross-border marketing and management of these products.

Along this line of action, the Commission proposed last year, in anticipation of the initial revision date, the amendment of both regulations, primarily in the following regards:

- Expand the types of managers that can promote and manage these funds to all managers regulated by the Directive (currently only managers with assets under management below a certain threshold are allowed);

- Extend the classification of assets these funds can invest in to include small mid-caps (unlisted companies with fewer than 500

employees). The current system only allows EuVECA funds to invest in unlisted companies with less than 250 employees, turnover below €50 million and an annual balance below €43 million.6

- Simplify and lower costs associated with cross-border marketing, which currently prevent the full effectiveness in practice of the passport granted under these regimes.

- In the case of EuSEF funds, reduce minimum investment requirements from €100,00 to €50,000.

- Establish unified rules for all Member States on own equity requirements for these types of funds (1/8 of total costs from the prior fiscal year).

- Establish a central registry of funds and EuVECA and EuSEF fund managers, to be managed by ESMA.

On March 22, 2016, the European Parliament confirmed that the members of its Committee on Economic and Monetary Affairs (“ECON”) were in support of the implementation of these and other amendments to both regulations in order to “make EuVECA and EuSEF funds more attractive for investors.”

Although as of the date of this report we are not certain when the legal and regulatory amendments briefly discussed above will take shape and be implemented, it seems indisputable that the European regulatory framework applicable to venture capital and private equity is still a long way from being finalized. Although changes and amendments to game rules already known are generally not welcomed by market operators, and despite the potential negative effects on business due to the uncertainty caused by such changes and amendments, we expect that, with a little bit of luck, most of the expected adjustments will be aimed at correcting errors, improving practices and eliminating inefficiencies existing under the current regime.

Isabel RodríguezSocia King Wood & Mallesons

5 The Capital Markets Union Action Plan was issued in September 2015 and is a central component of the Investment Plan for Europe to foster employment and economic growth in Europe.6 Commission Recommendation 2003/361/EC of 6 May 2003, concerning the definition of micro, small and medium-sized enterprises.

50

6. Sociedad de Desarrollo de Navarra, SA (SODENA)

7. Sociedad para el Desarrollo Industrial de Aragón, SA (SODIAR)

8. Sociedad para el Desarrollo Industrial de Castilla-La Mancha, SA (SODICAMAN)

9. Sociedad para el Desarrollo Industrial de Extremadura, SA (SODIEX)

10. Sociedad Regional de Promoción del Pdo. de Asturias, SA (SRP)

III. DOMESTIC PRIVATE VENTURE CAPITAL & PRIVATE EQUITY ENTITIES (S.G.E.C.R.)

1. Abac Capital

2. Active Venture Partners, SGEIC, SA

3. Adara Venture Partners

4. Addquity Growth Capital, SA

5. Ade Gestión Sodical SGEIC, SA

6. Alma Mundi Ventures, SGEIC, SA

7. Alter Capital Desarrollo SGEIC, SA

8. Ambar Capital y Expansión SGEIC SA

9. Artá Capital SGEIC, SA

10. Atlas Capital Private Equity SGEIC, SA

11. Aurica Capital Desarrollo, SGEIC, SAU

12. Avet Ventures SGEIC SA 

13. Axón Capital e Inversiones SGEIC, SA

14. Bankinter Capital Riesgo, SGEIC (Intergestora)

15. Baring Private Equity Partners España, SA

16. Beable Capital SGEIC, SA

17. Black Toro Capital LLP

18. Bullnet Gestión, SGEIC, SA

19. Caixa Capital Risc SGEIC, SA

20. Cantabria Capital SGEIC, S.A

21. Clave Mayor SGEIC, SA

22. Corpfin Capital Asesores, SA, SGEIC

23. CRB Inverbío SGEIC

24. CVP Asset Management, SGEIC, SA

25. Diana Capital, SGEIC, SA

26. EBN Capital SGEIC, SA

27. Eland Private Equity SGEIC SA

28. Espiga Capital Gestión SGEIC, SA

29. Everwood Capital SGEIC, SA

30. Finaves

31. Gala Capital Desarrollo

32. GED Iberian Private Equity, SGEIC, SA

33. Gescaixa Galicia, SGEIC, SA

34. Going Investment Gestión SGEIC

I. DOMESTIC PRIVATE VENTURE CAPITAL & PRIVATE EQUITY ENTITIES (S.C.R.)

1. Activos y Gestión Empresarial, SCR, SA

2. Amadeus Ventures

3. Angels Capital SL

4. Bonsai Venture Capital

5. BStartup

6. Caja Burgos, Fundación Bancaria

7. Compas Private Equity

8. Corporación Empresarial de Extremadura, SA

9. Fides Capital, SCR, SA

10. FIT Inversión en Talento SCR de Régimen Simplificado SL

11. Grupo Intercom de Capital, SCR, SA

12. Grupo Perseo (Iberdrola)

13. Healthequity SCR, de Régimen Simplificado SA

14. Indes Capital

15. Integra Capital SCR, SA

16. Investing Profit Wisely

17. Landon Investment

18. Murcia Emprende Sociedad de Capital Riesgo, SA

19. Najeti Capital, SCR, SA

20. Navarra Iniciativas Empresariales, SA (Genera)

21. Nero Ventures

22. Onza Venture Capital Investments Régimen Simplificado SA

23. Repsol Energy Ventures

24. Ricari, Desarrollo de Inversiones Riojanas S.A

25. Sinensis Seed Capital SCR, S.A

26. Santander Innoventures

27. Soria Futuro, SA

28. Telefónica Open Future

29. Torreal, SCR, SA

30. Unirisco Galicia SCR, SA

31. Univen Capital, SA, SCR de Régimen Común

32. Up Capital

33. Vigo Activo, S.C.R. de Régimen Simplificado, SA

34. VitaminaK Venture Capital SCR de régimen común, SA

II. DOMESTIC PUBLIC VENTURE CAPITAL & PRIVATE EQUITY ENTITIES (S.C.R.)

1. INVERTEC (Societat Catalana d’Inversió en Empreses de Base Tecnològica, SA)

2. Sadim Inversiones

3. SEPI Desarrollo Empresarial, SA (SEPIDES)

4. Sociedad de Desarrollo de las Comarcas Mineras, S.A (SODECO)

5. Sociedad de Desarrollo Económico de Canarias, SA (SODECAN)

COMPANIES INCLUDED IN THIS SURVEY

51

IV. DOMESTIC PUBLIC VENTURE CAPITAL & PRIVATE EQUITY ENTITIES (S.G. E.C.R.)

1. AXIS Participaciones Empresariales, SGEIC, SA

2. Cofides

3. Extremadura Avante Inversiones (antes Sociedad de Fomento Industrial de Extremadura)

4. Gestión de Capital Riesgo del País Vasco, SGEIC, SA

5. Innova Venture, SGEIC, SA (antes Invercaria Gestión)

6. Seed Capital de Bizkaia, SGEIC, SA

7. XesGalicia, SGEIC, SA

V. INTERNATIONAL VENTURE CAPITAL & PRIVATE EQUITY ENTITIES WITH OFFICE IN SPAIN

1. 3i Europe plc (Sucursal en España)

2. Advent International Advisory, SL

3. Aurelius

4. Bridgepoint

5. Cinven

6. Charme Capital Partners SGR S.p.A.

7. CVC Capital Partners Limited

8. Demeter Partners

9. Ergon Capital

10. Harvard Investment Group Capital (HIG)

11. Intermediate Capital Group (ICG)

12. Investindustrial Advisors, SA

13. Kohlberg Kravis Roberts (KKR)

14. MBO Partenaires

15. Oaktree Capital Management, L.P

16. PAI Partners

17. Permira Asesores

18. Quantum Capital Partners AG

19. Riverside España Partners, S.L.

20. Springwater Capital

21. The Carlyle Group España, SL

VI. INTERNATIONAL VENTURE CAPITAL & PRIVATE EQUITY FIRMS WITH OFFICEOUT IN SPAIN

1. 14W

2. Accel Partners

3. Adams Street Partners

4. Alchemy Capital Management

5. Altpoint Capital

6. Amadeus Capital Partners

7. Apax Partners España, SA

8. ArcLight Capital Partners

9. Arle Capital Partners

35. GPF Capital

36. Hiperion Capital Management, SGEIC, SA

37. Institut Català de Finances Capital SGEIC

38. Inveready

39. JB Capital Markets, S.V., SA

40. JME Venture Capital, SGEIC, SA (antes Fundación Entrecanales)

41. Kanoar Ventures, SGEIC, SA

42. Kibo Ventures

43. Magnum Industrial Partners

44. MCH Private Equity, SA

45. Meridia Capital Partners, SGEIC, SA

46. Miura Private Equity

47. Nauta Tech Invest

48. Nazca Capital, S.G.E.C.R, SA

49. Neotec Capital Riesgo

50. Next Capital Partners, SGEIC, S.A

51. Nmás1 Capital Privado, SGEIC, SA

52. Ona Capital

53. Oquendo Capital

54. PHI Industrial Acquisitions 

55. Portobello Capital

56. Proa Capital de Inversiones SGEIC, SA

57. Qualitas Equity Partners

58. Realza Capital SGEIC, SA

59. Renertia Investment Company SGEIC SA

60. Riva y García Gestión, SA

61. Sabadell Venture Capital

62. Samaipata Ventures

63. Seaya Ventures

64. Santander Private Equity SGEIC 

65. SES Iberia Private Equity, SA

66. Sherpa Capital Gestión

67. SI Capital R&S I SA,SCR de Régimen Simplificado

68. Swanlaab Venture Factory, SGEIC, SA

69. Suanfarma Biotech, SGEIC, SA

70. Suma Capital Private Equity

71. Taiga Mistral de Inversiones

72. Talde Gestión SGEIC, SA

73. Telegraph Hill Capital

74. Thesan Capital

75. Torsa Capital, SGEIC, SA

76. Uninvest Fondo I+D

77. Venturcap

78. Victoria Venture Capital

79. Ysios Capital Partners

52

55. Institutional Venture Partners

56. Intel Capital

57. Inversur Capital

58. Investcorp

59. Jackson Square Ventures

60. Javelin Venture Partners

61. JJDC Innovation

62. JZ International

63. Kennet Partners

64. Kleiner Perkins C&B

65. Kurma Partners

66. L Capital Asi

67. L Catternon Europe (antes L Capital)

68. London Venture Partners

69. Lundbeckfond Ventures

70. Magenta Partners

71. Maveron

72. Middleland Capital

73. Monsanto Growth Ventures

74. Naspers Limited

75. New Enterprise Associates

76. Nokia Growth Partners

77. OpCapita

78. Open Ocean

79. Otium Capital (antes Smart Ventures)

80. Oxford Capital Partners

81. P101

82. Palamon Capital Partners

83. Partech Ventures

84. Partners Group

85. Philips N.V.

86. Platinum Equity

87. Point Nine Capital

88. Prime Ventures

89. Providence

90. QED Investors

91. Qualcomm

92. Rakuten Inc.

93. Roche Venture Fund

94. Rose Tech Ventures

95. Rothenberg Ventures

96. RTAventures

97. SalesForce Ventures

98. Sandton Capital

99. Sapphire Ventures (antes SAP Ventures)

10. Atomico

11. Avalon Ventures

12. Avenue Capital Group

13. Bain Capital

14. Balderton Capital

15. Baxter Ventures

16. Bertelsmann SE & Co

17. Boehringer Ingelheim

18. Boston Seed Capital

19. Bruckmann, Rosser, Sherrill & Co

20. Canada Pension Plan Investment Board (CPPIB)

21. CCMP Capital Advisors

22. Cerberus Capital

23. Cisco Investments

24. Connect Ventures

25. Coral Group

26. Correlation Ventures

27. Costanoa Venture Capital

28. Chiesi Ventures

29. Data Collective VC

30. Delta Partners Group

31. Digital Sky Technologies

32. DLJ South American Partners

33. Early Bird

34. Edmon de Rothschild I.P.

35. Eight Road Ventures

36. Elaia Partners

37. Emerige Societe par Accions Simplifiee

38. Entrée Capital

39. Eurazeo

40. Fidelity Growth Partners Europe

41. First Reserve

42. Forbion Capital Partners

43. G Square

44. GGM Capital

45. GGV Capital

46. Gilde Healthcare Partners

47. Greylock Partners

48. Highland Capital Partners

49. Horizon Ventures

50. Idinvest Partners

51. Index Ventures

52. Industry Ventures

53. Initial Capital

54. Insight Venture Partners

53

100. Scope Capital Advisory

101. Sequoia Capital

102. Siemens AG

103. Sigma Partners

104. SoftBank

105. Sonae Ventures

106. Spark Capital Partners

107. Stage 1 Ventures

108. StepStone Group

109. Sun Capital

110. Sunstone Capital A/S

111. TA Associates

112. TC Growth Partner

113. Techstars Ventures

114. Tekton Ventures

115. Tiger Global Management

116. Top Tier Capital

117. Trident Capital

118. Trilantic Partners

119. Triton Investment Advisers

120. Vulcan Capital

121. Vy Capital

VIII. ENTITIES THAT CEASED ACTIVITY IN 2016

1. BBVA Venture

2. Innova 31, SC

3. Madrigal Participacione

4. Valanza

IX. ENTITIES THAT START THEIR ACTIVITY IN SPAIN IN 20161

1. Alma Mundi Ventures, SGEIC, SA

2. Amadeus Capital Partners

3. Beable Capital SGEIC, SA

4. Canada Pension Plan Investment Board (CPPIB)

5. Charme Capital Partners SGR S.p.A.

6. Collins Capital Desarrollo SCR-PYME, SA

7. CVP Asset Management, SGEIC, SA

8. Emerige Societe par Accions Simplifiee

9. Entrée Capital

10. Everwood Capital SGEIC, SA

11. Integra Capital SCR, SA

12. Intermediate Capital Group (ICG)

13. Investcorp

14. JB Capital Markets, S.V., SA

15. Kanoar Ventures, SGEIC, SA

16. Meridia Capital Partners, SGEIC, SA

17. Philips N.V.

18. Rakuten Inc.

19. Siemens AG

20. Swanlaab Venture Factory, SGEIC, SA

X. OTHER PUBLIC ENTITIES WITH COMPLEMENTARY INVESTMENT IN THE PRIVATE EQUITY & VENTURE CAPITAL SECTOR

1. Centro para el Desarrollo Tecnológico Industrial (CDTI)

2. Empresa Nacional de Innovación, SA (ENISA)

3. Institut Català de Finances (ICF)

4. Institut Valenciá de Competitivitat Empresarial (IVACE)

5. SODIAR

XI. MANAGING COMPANIES OR ADVISERS OF TRANSNATIONAL FUNDS THAT REACTIVATED THEIR ACTIVITY IN SPAIN

1. Otium Capital (antes Smart Ventures)

2. Providence

3. TA Associates

1 To these 20 incorporations in the Private Equity & Venture Capital market, it would have to be added several international funds whose name is confidential although its added activity in 2016 is reflected in the report.

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