Every year brings new lessons. I share the most significant reflections from 2024: about markets, about people, and about the craft of investing in the Spanish middle-market.
I have been investing in Spanish companies for more than fifteen years. Each year I think I have seen everything, and each year proves me wrong. 2024 has been no exception. These are the lessons I take away, ordered not by importance but by the moment I learned or reconfirmed them.
In the first quarter of 2024, we lost a deal we were very interested in. A competitor closed faster: they presented a binding offer in three weeks when we needed six to complete our analysis. The seller chose the certainty of a quick close over the quality of our proposal.
My first reaction was frustration. My second, upon reflection, was recognition — recognition that the seller had legitimate reasons for prioritising speed. But also conviction that our way of doing things — analysing thoroughly, not skipping steps, not promising what we have not verified — is correct over the long term.
Speed without rigour is recklessness. We have seen competitors close deals quickly and regret slowly. We prefer to take a little longer and be certain we know what we are buying.
It sounds like a cliché, but 2024 confirmed it with three concrete examples. One portfolio company with excellent fundamentals had a mediocre year because it lost its commercial director, who left for a competitor taking several clients. Another company, with more modest fundamentals, had an extraordinary year because its operations director implemented process improvements no one else had seen possible. And a third company rejected our acquisition offer because the founder did not connect personally with us, despite our offer being the highest.
In the middle-market, companies are the people who manage them. Everything else — product, market, assets — is secondary.
2024 has been a year of changes: changes in financing, regulatory changes, changes in sellers’ expectations. Investors who operated with rigid models lost opportunities. We maintained our philosophy intact but adapted our execution: we have been more creative in deal structuring, more flexible on timelines, more open to formulas we had not used before. Discipline in principles is compatible with flexibility in methods.
In the second quarter, one of our portfolio sectors suffered a difficult quarter due to unexpected regulatory changes. Because we have presence across six different sectors, the impact was absorbed without consequences for the whole. Diversification is not a conservative strategy — it is the smartest long-term investment strategy I know.
A perception I have encountered more frequently in 2024 is that patient capital means passive capital. We are patient in our investment horizon, not in management. When we acquire a company, we act with determination: implementing improvements, establishing targets, measuring results. Patience applies to the time we are willing to wait for those improvements to generate their full impact, not to the intensity with which we work to achieve them.
In several 2024 negotiations, I shared with the seller information that, in a traditional negotiation, I would have kept to myself. The result has been consistent: when we are transparent, the seller reciprocates. Transparency has a short-term tactical cost but generates a long-term strategic benefit that far exceeds it.
I have observed a direct correlation between the quality of the seller’s advisers and the probability of the deal closing satisfactorily. Good advisers manage their client’s expectations, facilitate information flow, resolve problems before they escalate, and keep the process moving. Bad advisers do exactly the opposite.
In 2024 we said “no” to more opportunities than ever. Not because the market was worse, but because we have been more disciplined in our investment criteria. The cost of error by action — investing in a company you shouldn’t have — is much greater than the cost of error by omission.
2024 has been a good year for Blue Mountain. Not spectacular, not mediocre. Good. And in our philosophy, the consistency of good years is more valuable than the spectacularity of exceptional ones. We have learned new things, confirmed things we already knew, and made mistakes we will learn from. It is the natural cycle of this craft, and it is what makes it fascinating after more than fifteen years.
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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