Private Equity

Market overview
1.1 Types of investors
The main investors in the private equity sector, which includes venture capital funds, are traditional market players, notably financial institutions, public investors, collective investment undertakings and their respective management companies, insurance companies, and private investors in general. A minimum investment in venture capital funds of €50,000 is mandatory.
1.2 Types of investments
The main types of investment carried out by venture capital funds in Portugal are management buyouts, expansion/development of companies, startups and additionally, in the restructuring or amalgamation of (pre)insolvent companies seeking their recovery. Seed capital is also a typical transaction performed by venture capital funds, which is gaining a greenfield of implementation due to the opportunities the market is currently presenting.
According to provisional data available, in 2013, investment amounted to approximately EUR 300 million, of which the largest percentage was in management by-outs, whereas start-ups (in connection with entrepreneurship) represented about 10% of this amount. This is a strong indicator of a new trend in the investment strategies of venture capital funds, which are starting to contemplate investment in early stage businesses.
The general increase in investment is also directly linked to turnaround funds (corporate recovery funds), which as per the available data of the Portuguese Securities and Markets Authority (CMVM) (Annual Report of Private Equity Activity 2012), represented in 2012 approximately 41% of all investments and revitalisation funds, first set up in 2013, aiming at a sustainable capitalisation of small to medium enterprises.