The Círculo Ecuestre hosted this Tuesday the I Encuentro “Protagonistas que van más allá”, the new cycle of conferences organized together with Grant Thornton. On this occasion, the protagonist was the founding partner and CEO of Abac Capital, Oriol Pinya, who highlighted the evolution of private equity in Spain and its consideration by the public sector. The event was presented by Aurora Sanz, member of the Board of Círculo Ecuestre, and Jordi Santamaría, partner in charge of Legal at Grant Thornton.
In this regard, the executive assured that private equity is a strategic partner for growing companies and a driver of the economy. “In Spain, public programs have been launched that have been very useful for channeling funds. The public sector has understood that investing through professional managers makes more sense than doing so directly, because managing these companies requires specialization and appropriate incentives,” Pinya explained. These public programs represent “an enormous help” for funds to invest in Spain.
The founder of Abac Capital celebrated this paradigm shift, which in his opinion directly impacts the evolution of a country's GDP. “Economies where there is more private equity tend to be more dynamic, more innovative, and have a greater capacity for transformation,” he stated.
Regarding the value that this practice brings at a business level, Pinya argued during the meeting that private equity has moved from being a merely financial tool to becoming a strategic partner for companies. In his words, when a company incorporates private equity —whether in venture capital or private equity— it is not just an investor providing funds who enters, but someone who also brings knowledge, contacts, vision, experience, and support capacity. “Often the entrepreneur has built his company alone and, suddenly, finds a partner who helps him think, structure, and grow.”
The potential of the middle-market
Pinya highlighted the great opportunity currently represented by the Spanish family business in the middle-market, a segment filled with solid businesses and relevant track records, but which, however, do not always have the appropriate scale to compete globally. Added to this is the challenge of succession, as these companies often represent both the founder's life project and a fundamental part of their family wealth.
"That is where private equity can play a very useful role," Pinya explained. “Not only by providing resources, but by helping those companies become more international, more digital, more sustainable, and stronger.” In this sense, the CEO of Abac Capital defended a long-term relational approach —getting to know entrepreneurs and sectors over time— with an active search supported by advisors and market contacts.
The risk of hubris
“We invest in very different sectors and it would be absurd to pretend that we know each business better than the founder or the management team. Our role is not to replace that knowledge, but to help organize, challenge, and expand it,” he explained. According to his words, private equity must provide strategic reflection, professionalization of management, identification of acquisition targets, and talent attraction.
When questioned about the most recurrent mistakes in the sector, Pinya distinguished between exogenous factors —such as Covid-19, which affected perfectly reasonable investments without anyone being able to foresee it— and endogenous errors. Among the latter, he pointed to one as especially recurrent: hubris.
”Thinking you know more than you actually do. Convincing yourself that you are going to fix a company just because you enter. Believing that a company that wasn't growing will suddenly start growing. Or thinking you can do without the founder prematurely”. In companies where the business depends on the knowledge, relationships, or intuition of a specific person, removing that pillar prematurely can leave the company orphaned, according to the CEO of Abac Capital.
A “black swan” every two weeks
Pinya also analyzed the current moment with an eloquent image: “I usually joke that before a black swan appeared once in a while and now it seems one appears every two weeks”. In a more interconnected system, volatility is amplified and valuing a company —which involves bringing future cash flows to the present— becomes much more difficult when the macroeconomic environment is unpredictable.
In this sense, the executive identified two major structural trends that will mark the business ecosystem in the coming years. The first is artificial intelligence: “It seems to me a spectacular transformation. Just as at the time it was necessary to learn how to use Excel, PowerPoint, or the internet, now it is necessary to learn how to work with AI”.
The second major trend is sustainability, understood no longer as an added reputational element, but as a real transformation of business models. Large listed companies are more advanced, partly due to regulation, but this requirement is already reaching SMEs. “Private equity can do something especially valuable here: take an SME and help it become more digital, more sustainable, more professional, and prepared to grow”. Regarding the future of the sector, Pinya was categorical: “Spain needs more private equity, not less. When it works well, not only does the investor or the entrepreneur win, the economy as a whole also wins”.