By Fernando Rodríguez, in Madrid | Maite Ballester is president at the Spanish Venture Capital Association ASCRI, which is a non profit entity born in 1986 to develop and promote temporal investment in private companies. She also is managing director at 3i.
In what way will Spain’s venture capital sector be affected by the financial system reform and more stringent rules on bank capital reserves? In the short term, these two factors will mean less and more expensive credit, and also a lack of availability of working capital. Our main worry right now is to ensure that companies in which we have a stake can finance their production and growth over the coming two years.
Then, most of the venture capital market operators are focused almost exclusively on managing their portfolio of companies? Almost all of them are managing their portfolios but they search for new opportunities, too. Prices have fallen, and that’s attracting many investor funds. Prices have dropped from 6 to 9 times EBITDA (Earnings before Interest, Taxes, Depreciation and Amortization) compared to the peak achieved in 2006 and 2007. And these levels are reasonable.
Is there still more room for prices to fall firther? Some businessmen have noticed that they should have sold in 2007 or 2008. Others don’t want to sell below a specific price, and they hold on.