There's a first time for everything. As head of Riverside Co.'s nine-person European origination team, Juan Barnechea Aldatz has orchestrated a long roster of midmarket investments across the Continent. But not until November 2011 did the buyout shop make an investment in France, acquiring a significant minority stake in Paris-based reproductive health specialist HRA Pharma.
These days, Riverside is eyeing prospective investments in Germany, the U.K. and the Benelux region as well as Central and Eastern Europe and Turkey. Though Spain, Portugal and Italy are "tough regions" amid the current economic turmoil, Barnechea says, there may be opportunities to buy good companies at low valuations. Greece, on the other hand, is out of the question. "If we ever were to buy a Greek company, we would have to do a lot of explaining to our investors," he says.
"Every week we are looking at maybe 20 opportunities all over the world, which gives us the luxury of being about to choose the crème de la crème," says Barnechea, who was recently promoted to managing director in recognition of his leading the Europewide origination team since 2010.
Based in Riverside's Madrid office, Barnechea started with the firm in 2008 as head of its Iberian origination efforts before becoming director for all of Europe two years later. He previously served as director and head of corporate markets at Lloyds TSB Bank plc in Spain, where he managed a team responsible for all corporate banking and structured finance activities. He also worked in corporate banking with Lloyds TSB in the United Kingdom, Brazil and Argentina.
With $3.2 billion in capital and more than 200 professionals spread across 14 countries in North America, Europe and Asia, Riverside bills itself as the world's largest private equity firm focused on the smaller end of the middle market -- targeting deals with an enterprise value of less than $200 million. Among others in the European midmarket space: H.I.G. Capital LLC and Doughty Hanson & Co.
Besides Madrid, Riverside's European origination team has people on the ground in Munich, Warsaw, Brussels and Stockholm. Of the 4,000-plus deal opportunities Riverside screened last year, 1,300 were in Europe -- leading to seven acquisitions (out of 29 total globally).
Instead of targeting specific sectors or regions, Riverside pursues companies with strong international growth prospects -- and then harnesses its global reach to further spur growth, often through add-on acquisitions.
In the current environment, fundraising is a challenge. "Everybody will tell you it's a tough environment, especially in Europe," says Barnechea, "but the actual numbers have not been that bad in terms of volume." The key for Riverside is to differentiate itself from the competition, he says. "It's going to be tough, but it's doable."