21 Invest and CDC link up in Spain

Two private equity groups that have already scored notable successes in Spain have revealed plans to co-operate to exploit the Spanish private equity market’s potential for development. 21 Invest, the Benetton/Bonomi investment vehicle, and Charterhouse Development Capital, the private equity arm of CCF Charterhouse, will share responsibility for 21 Invest Partners SA, a Madrid company which will source and effect Spanish transactions on behalf of both groups. The new business has no investment capital of its own, but will draw on the resources of its founders.

21 Invest and CDC have pulled off something of a coup in signing Jose Maria Cuevas Salvador as chairman of the new operation. As head of the CEOE, Spain’s confederation of employers’ organisations, Cuevas is one of the country’s best-connected industrialists. Edward Benthall of Charterhouse describes him as a household name’, predicting that his connections will prove invaluable to the new operation.

One might also assume that the headline-hitting successes of CDC’s investment in Superdiplo and 21 Invest’s in Grupo Picking Pack have ensured a degree of recognition for both investors in the Spanish business community.

21 Invest Partners SA, which will initially build a team of six executives, provides a simple mechanism through which its founders can band together to cover the Spanish market more effectively to their mutual benefit.

On the face of it, the two make unlikely bedfellows. Few would suggest that 21 Invest and CDC normally operate in the same market segment. CDC raised the first of the $1 billion-plus behemoths, Charterhouse Capital Partners VI, back in 1997, and therefore now sets a seriously chunky minimum size for deals through its main fund. 21 Invest, meanwhile, specialises in mid-market majority control investments, and, although its industrial connections throughout Europe are impeccable, cannot bring the same financial muscle to bear as CDC. 21 Invest will back smaller deals, showing larger transactions to CDC on a first refusal’ basis, and will have the right to co-invest alongside CDC in any larger Spanish transactions the UK group does decide to back.