The perception of private equity in Spain is distorted by headlines from large deals. In the middle market, the reality is very different. We debunk the most widespread myths.
When a Spanish entrepreneur hears “private equity” or “investment fund,” a fairly concrete image forms: financial sharks who buy companies with debt, cut staff, squeeze the business for three years, and sell for triple. This image is fed by movies, headlines, and — it must be acknowledged — some real cases of predatory practices. But it does not represent the reality of private capital in the Spanish middle market.
Myth 1: All investors want the same thing. A leveraged buyout fund has nothing in common with a family office buying with its own capital. In the Spanish middle market, very different investors coexist: international PE funds, national mid-market funds, family offices, private estates, industrial investors, and search funds.
Myth 2: The investor only wants to buy cheap. Professional investors seek a price that reflects real value and leaves room to generate returns through genuine value creation — not “bargains.”
Myth 3: The first thing an investor does is fire people. In the Spanish middle market, the vast majority of investment deals generate net employment, not destroy it.
Myth 4: The investor will change everything. A good middle-market investor respects what works and changes what does not. The most common changes are gradual: implementing financial reporting, adding a complementary director, investing in efficiency-improving technology.
Myth 5: Once you sell, you lose all control. Many middle-market deals involve partial sales — 51%, 60%, 70% — where the entrepreneur maintains a significant stake and an active management role.
Track record. What has this investor done with the companies they have bought?
Source of capital. Is it proprietary (family office) or third-party (fund)? Is there short-term return pressure?
Team. Do the people who will be involved have operational experience, or are they purely financial?
Value proposition. What will the investor contribute beyond money?
Consistency. Is what the investor says in meetings consistent with what they do in their other investments? Words are cheap. Facts are expensive. Verify.
The Spanish middle market deserves good investors. And Spanish entrepreneurs deserve to demystify private equity so they can choose wisely.
Dirk Manuel Martens Jimenez Founder, Blue Mountain Capital
Founder of Blue Mountain
Over 15 years investing in Spanish companies with patient capital. Expert in business succession, corporate governance, and middle-market investment.
By Blue Mountain Capital
By Dirk Manuel Martens Jiménez
By Dirk Manuel Martens Jiménez
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