Private equity exposure among insurers and pension funds in Spain still has room to converge with the European average. This was one of the main conclusions of the Observatory “The potential of private equity for insurers and pension funds: facing a new regulatory shift,” organized by Qualitas Funds in collaboration with Cuatrecasas.
The event, held at Club Financiero Génova in Madrid, featured Javier Alemán, Partner at Qualitas Funds; Jorge Canta, Partner at Cuatrecasas; Romualdo Trancho of Mercer Europe; María Concepción Bravo Herrero of Mapfre AM; Josep Sentís of Banco Sabadell Asset Management; Antonio José Hernández Corona of BBVA Asset Management Spain; and Antonio Morales, CFA, of Mutua Madrileña.
The discussion focused on the impact of ongoing regulatory reforms, particularly within the frameworks of IORP II and Solvency II. This more favorable regulatory environment could act as a catalyst for increasing institutional investors’ allocation to private markets. Beyond asset allocation considerations, participants agreed that Spain must move forward in building a robust complementary pension pillar, supported by large institutional investors with long-term investment capacity.
As Jorge Canta, Partner at Cuatrecasas, explained: “Both regulations aim to harmonize investment in alternative assets across Europe, allowing certain vehicles such as ELTIFs (European Long-Term Investment Funds) or EuSEFs (European Social Entrepreneurship Funds) to benefit from lower capital requirements without having to apply look-through (the obligation to decompose a fund to assess the vehicle’s actual risk). The European Union is working on a reform of IORP II aimed at harmonizing asset investment rules, particularly in private equity, across all Member States.”
Appetite for the asset class is evident. “Nearly 40% of institutional investors plan to increase their private equity investment over the next year,” said Javier Alemán, citing data from Mercer’s report “Large Asset Owners Barometer 2025.” Romualdo Trancho, Sales Leader of Investment Solutions & OCIO Services at Mercer, added that “more than 50% of asset owners have increased their exposure to private markets in response to heightened economic and geopolitical risks.”
In this context, the lower mid-market segment stands out not only for its higher return target but also for its lower correlation with other assets typically found in pension fund or insurance portfolios. This combination—higher return potential and greater diversification—makes it a natural fit for such portfolios, helping both to enhance expected returns and improve overall diversification. “Spanish pension plans are 18% below the European average in returns and 40% below the United States,” added the Qualitas Funds partner.
From Grupo Mutua Madrileña, Antonio Morales, Head of Private Investments, recalled: “We began our exposure to alternative investments in 2009 and currently allocate around 15% of our portfolio to this type of investment, particularly private equity and infrastructure.” Antonio Hernández, Head of Institutional Asset Allocation at BBVA AM, highlighted that the firm entered private markets in 2006. In recent years, the emergence of evergreen funds “has allowed us to expand our private markets program with an additional semi-liquid strategy.” For the BBVA representative, the regulation allowing clients to redeem pension plans after ten years is “restrictive.” “A product designed for retirement should not change its rules mid-game.” The J-curve effect, capital efficiency, and regulatory burden were also cited as “additional constraints.”
From Sabadell, Multi-Asset Investment Director Josep Sentís emphasized that “the lack of a robust secondary market and indirect fees are two limiting factors” for increasing private equity allocation. “We have an inefficient secondary market, with discounts of up to 40%, making it difficult to plan exits.” María Concepción Bravo, Deputy Director of Alternative Investments at Mapfre, explained that the insurer is also advancing its private equity strategy. “Our goal is to maintain consistent exposure to private equity regardless of economic cycles.” These alternative investments help diversify the balance sheet with a portfolio balanced in terms of risk-return and diversified by investment horizon, company size, and geography.
Spain needs to advance in building a solid complementary pension pillar supported by large institutional investors capable of long-term investment and of enhancing the country’s strategic and financial autonomy. Among the initiatives implemented in other countries, auto-enrollment stands out, having been successfully introduced in the United Kingdom and significantly increasing participation in occupational pension plans within a few years.
Large occupational funds, with independent and professional management, are the most active investors in private markets and semi-liquid assets, playing a fundamental role in the development of domestic capital markets. In Spain, José Luis García Muelas, Chief Strategist at Loreto Mutua, noted that “well-designed tax incentives, such as those being implemented in the Basque Country, could serve as another lever to accelerate the growth of complementary savings. Likewise, creating sector-specific funds, as has been done in the Netherlands and Denmark, would enable the development of large-scale investors. Activating the public sector employment pension plan would represent a decisive boost.”
Finally, García Muelas stressed the need to place returns at the center of the debate on pension system sustainability: “Strategies such as the Total Portfolio Approach for large occupational plans or life-cycle models for smaller plans will gain prominence. Minimum investment thresholds or tax incentives in alternative assets—already in place in France and Italy—may also need to be considered.” Currently, Spanish insurers and pension fund portfolios maintain a high concentration in listed fixed income, particularly government debt, above levels seen in other European countries. According to Loreto Mutua’s Chief Strategist, this composition limits exposure to assets offering higher long-term returns. “Reducing capital consumption requirements for higher-risk assets (equities, private equity, venture capital, etc.) would help increase their weight in insurers’ portfolios. The experience with infrastructure funds shows that regulatory adjustments of this kind can reshape capital allocation toward greater diversification.”
In conclusion, the Observatory “The potential of private equity for insurers and pension funds: facing a new regulatory shift” highlighted that private equity can play a key role in improving returns and diversification in Spanish institutional portfolios, particularly within a regulatory framework evolving toward greater European harmonization. All speakers agreed that its development will contribute to strengthening institutional savings and enhancing the long-term sustainability of the pension system.
About Qualitas Funds
Qualitas Funds, a Ridgepost Capital strategy, is a Madrid-based private markets investment platform offering fund-of-funds, direct co-investment funds, NAV financing, and secondaries in the lower mid-market to more than 1,600 investors, including UHNW individuals, family offices, and institutional investors. As of December 31, 2025, the firm manages over €1.4 billion in assets.
Visit www.qualitasfunds.com.
About Ridgepost Capital
Ridgepost Capital (NYSE: RPC) is a leading private markets solutions provider, with more than $43 billion in assets under management as of December 31, 2025. Ridgepost Capital invests in Private Equity, Private Credit, and Venture Capital through restricted-access strategies focused on the middle market and lower-middle market. Its products serve a global investor base and aim to deliver attractive risk-adjusted returns. For more information, visit https://ridgepostcapital.co
cloud technology axon
With a target size of €250 million, the fund aims to complete betwee...
