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Venture capital fund BBVA Capital Privado F.C.R, managed by BBVA Gestión, will start trading as of June 27th on the Mercado Alternativo Bursátil (MAB). Its listing will thus mark the start of operations on this segment for venture capital firms, following its approval by the Board of MAB.
Investors will be able to buy units in the fund at a minimum of € 10, which will allow retail investors to diversify their investments and build a presence in the venture capital segment.
The listing of private equity funds and companies on an organised market allows these firms to benefit from greater liquidity and transparency and helps to popularise this new asset class; it also facilitates the incorporation of these assets into the portfolios of both retail and institutional investors.
MAB’s market model for securities issued by private equity entities will be based on a price fixing facility which will match supply and demand during an auction period or “fixing”.
Another feature of this market model is the specialist intermediary, who will commit to providing liquidity and counterparty positions according to the terms established for each security. The specialist’s task will be to introduce bid / ask positions into the market for a minimum value and a maximum bid / ask spread relative to the reference price for each security.
The Circular approved by the market also outlines the disclosure requirements for venture capital firms.
Private equity has gained momentum in Europe and Spain and constitutes a valuable source of financing and a valuable tool for the management of companies that are not listed on stock exchanges.
The law 25/2005 of 24th November, which regulates private equity firms and their management entities, gives these entities more flexibility and introduces new financial vehicles, which are becoming ever more common in our neighbouring countries.
One of them is the possibility of diversifying investment by creating private equity funds and firms, the assets of which must be invested basically in this type of instruments. This vehicle has been designed to broaden the traditional investor base in private equity by including other investors, such as institutional and even retail investors.
The regulation of the Mercado Alternativo Bursátil (MAB) envisages the trading, settlement and registry of securities or financial instruments which, due to their specific features require special treatment, such as private equity firms, both whether they invest in other private equity companies or directly, in securities issued by private equity firms.
MAB’s trading system started on May 29th 2006, when the first SICAVs joined the market. Currently it lists 3,181 companies.
