SPAIN Law and Practice Contributed by: Ignacio Sanjurjo, Ignacio Echenagusia, Alejandro Espín and Román Cantín, Deloitte Abogados y Asesores Tributarios, S.L.U.
Spanish market continues to be an attractive hub for foreign fund managers, one of the market challenges will be attracting more international investment in order to emulate the foreign investment peak reached in 2022, when 224 foreign PE and VC investments were completed, with a total investment of EUR7,400 million. In terms of VC and PE fundraising, a total of EUR4,701 million was raised in 2024, representing the highest- ever figure and a 51% increase compared to 2023. Another challenge for the market will be to maintain this level of fundraising in the future. Finally, it will also be important to consider potential geopolitical and macroeconomic developments that may arise at both the national and international levels. Such developments may include, inter alia, a potential resolution of the Russia–Ukraine and Israel–Palestine conflicts, and an agreement between the EU and the USA; European exports to the USA being subject to a tariff of 15% while US products can enter the Europe - an market without tariffs could lead to greater distrust in European markets. All of these – and other – variables must be closely monitored, as they may significantly impact investor confidence and the overall investment outlook. Warranty and Indemnity (W&I) Insurance The use of representations and warranties (R&W) insurance has increased in recent years across trans - actions, and is particularly prevalent in PE and VC transactions. According to the 2024 Global M&A Intelligence Report published by DLA Piper, 56% of transactions exceeding EUR50 million in deal value in 2023 incorporated R&W insurance as a guarantee. This growing use of R&W insurance has led to com - petition among insurers, which ultimately benefits the investor. The instability of the current geopolitical landscape has prompted investors to seek guarantee mechanisms (such as R&W insurance) that ensure a minimum level of protection. Technology in M&A Processes Technology has become an integral element of mod - ern M&A practice, not only in terms of the growing reliance on virtual platforms for holding meetings in
order to expedite processes but also as a result of the increasing use of digital signature and artificial intel - ligence tools, which are commonly employed by law firms to assist with M&A transactions. 1.2 Market Activity and Impact of Macro- Economic Factors According to the above-mentioned SpainCap report, in terms of the total amount raised, the technology and internet sector was the leading area for PE and VC investment during 2024, representing approximately 40% of the total funds. The increase in investment in this sector was particularly significant compared to 2023, where it was around 10% of the total funds. The services and healthcare sectors accounted for between 10% and 20% of the total funds. The most significant transactions were in: • the internet sector (involving Idealista and the PE fund Cinven); • the services sector (involving Nace Schools and Wenden, and Prosur and ICG); and • the healthcare sector (involving Proclinic and Miura Partners, and IPD Dental Group and Proa Capital). Regarding the proportion of investments, the technol - ogy and internet sector again led the way in 2024, accounting for approximately 30% to 40% of total transactions, followed by the healthcare sector, with between 20% and 30% of the deals, and then by the services sector, which accounted for around 10% of the total transactions. The 2024 Annual Report issued by TTR Data, disag - gregating the 2024 data between PE and VC, notes that: • in terms of PE investments, the internet, software and IT sector recorded the highest number of transactions in 2024, totalling 45 (a 2% decrease compared to 2023), followed by manufacturing (36 transactions; a 38% increase), the renewable energy sector (33 transactions; a 43% increase) and finally business and professional support ser - vices (33 transactions; a 30% decrease); and • in terms of VC investments, the software sector and the internet and IT services sector had the joint most transactions in 2024, totalling 134 (a 60%
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