Jacobo Vera has launched a search fund targeting Spanish companies with €5–20m of revenue, backed from the outset by Arada and more than twenty other investors.
The search fund ecosystem continues to grow in Spain, with increasing acceptance of this model of entrepreneurship through the acquisition of a single company. Arcadio Investments has been created to facilitate the generational handover for an owner who wants to preserve the legacy and character of their company. The firm, led by Jacobo Vera, is actively seeking a partnership with the founder of an SME in order to manage it and grow the business over the long term.
Arcadio targets companies in sectors with growth prospects, sustainable returns and low exposure to external factors such as regulation and the economic cycle, with a niche or high-value product or service and a stable, diversified client base. Specifically, it focuses on businesses with revenues between €5m and €20m with a track record of growth and stable earnings.
We join the management team full time and travel to their headquarters to run the day-to-day. Unlike traditional private equity, we dedicate 100% of our time, energy and capital to the continued success and growth of the one company acquired.
Arcadio Investments is backed by more than twenty partners — institutional and individual investors, national and international — with substantial experience as operators, investors and entrepreneurs. They support the searcher in investment decision-making through the investment committee, and subsequently in the operational management of the company through the board.
Among those investors, Arada Capital Partners has supported Jacobo Vera from the very beginning.
Spain is one of the main players in the search fund ecosystem, thanks to several factors driving the proliferation of these vehicles. The typical target is an SME with EBITDA between €1m and €3m — companies with a track record of profitability and growth whose owners want to sell for succession or other reasons. Banks view these transactions favourably when financing the acquisition and the subsequent strategic plan, as they involve proven, solvent businesses with sound financial structures.
After the baby-boomer generation, simple demographic reasoning makes clear that the number of SMEs available to be acquired is very high. And although there are many search funds in Spain, competition remains limited and much lower than in segments of the market where acquisitions are larger.
Arada's recent investments also include Signatus Capital, the search fund led by Enrique Sales, who acquired IESMAT last December.