At Crowe, we consider search funds an “alternative, profitable asset class that is positive for the Spanish economy.” These funds aim to identify and acquire profitable companies, connecting entrepreneurs with SMEs undergoing succession or transformation processes, which typically seek continuity and professionalization.
Since the establishment of the first search funds in the 1980s in North America, the number of such vehicles has steadily grown in Spain (it is estimated that over 70 search funds have been created and more than 60 transactions completed in the last decade), positioning Spain as one of the most dynamic markets for these funds. In 2024, the search fund model could still be considered an emerging trend. However, today, the market has not only confirmed this trend but has also consolidated it as an increasingly relevant vehicle within Spain’s investment and transaction ecosystem.
This growth can be explained by factors such as a business landscape dominated by family-owned SMEs that need to manage orderly generational transitions, and a growing pool of entrepreneurs and investors with experience in banking, consulting, and private equity who are willing to pursue long-term value creation models.
The rise of search funds has been supported by greater operational sophistication, with more thorough due diligence processes, diversified financing structures, and early-stage value creation planning post-acquisition. As this ecosystem accumulates experience and success stories, investor, lender, and seller confidence grows, generating new opportunities that attract capital to this sector and make these vehicles more visible in competitive processes, often competing with private equity or institutional buyers.
Therefore, the outlook for the coming years remains positive, with thousands of SMEs expected to face succession processes over the next decade, growing interest from family offices and institutional investors, and the emergence of specialized funds investing in this vehicle. In an environment where investors seek differentiated strategies, search funds are positioning themselves as instruments for business continuity and value creation.
In this context, search funds and their investors face various challenges and complex decisions requiring an integrated financial, tax, legal, and strategic vision, both for the initial structuring of the vehicle and the execution of the transaction and post-closing risk management. For this reason, the support of experienced advisors is key to increasing the likelihood of transaction success.
Fernando Segú, Managing Partner, Financial Advisory,Crowe
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