Arcano closes latest secondaries fund at €100m

The Madrid-based firm has targeted Spanish-only investors for its latest secondaries vehicle, which is almost half invested.

Spanish private equity firm Arcano Asset Management, the investment arm of Arcano Group, has closed its latest secondaries fund after about two years of fundraising.

Arcano Secondary Fund II held a final close earlier this year at €100 million, Arcano chief investment officer Ricardo Miró-Quesada told Secondaries Investor, without specifying the month.

The Madrid-based firm’s first secondaries fund, Arcano Secondary Fund I, closed at $700 million in March 2012 after about a year of fundraising and attracted non-Spanish investors only.

“There is more competition in the larger deals,” said Miró-Quesada,”and now what we see is more opportunity in smaller deals. With a smaller size we are also able to invest it quicker and return the capital to our LPs faster.”

Arcano Secondary Fund II is already close to 50 percent invested and the firm aims to fully invest the fund by the first half of 2016. The fund is aiming to invest in 15 funds in the US and Europe, Miró-Quesada said, adding that the firm has historically focused on buyout funds. The fund is aiming for a minimum internal rate of return of 15 percent and at least a 1.5x return on capital, he said.

Fund I has an IRR of 24 percent, Miró-Quesada said.

“In 2011, the situation was different and we saw a larger opportunity in the US,” he said. “We raised money there and invested most of the fund in US buyout funds. Now, it’s obviously a different environment and Spain has recovered. We could raise money again in Spain after the crisis, so we decided to target Spanish LPs for this specific fund.”

Arcano plans to launch its next fund of funds in 2016. The vehicle would include secondaries as a strategy, though the firm hasn’t decided if its next fund will be a dedicated secondaries vehicle, Miró-Quesada said.

The firm currently manages nine funds, including funds of funds and co-investment funds investing in mature as well as emerging markets such as in Latin America, Africa, Turkey and Central Europe.

Arcano has €2.8 billion of assets under management and was established in 2005. The firm has investment banking, asset management and advisory services with offices in Madrid, Barcelona and New York, according to its website.