Typical leverage in Europe/Spain

searcher profile

September 12, 2023

by a searcher from IESE Business School in Barcelona, Spain

Hi all,

I'm thinking to start a Self funded search fund, and I was wondering what is the typical leverage we can assume in Europe, particularly in Spain. Can anybody share any experience/rule of thumb?
Thanks,

Xavi

0
2
35
Replies
2
commentor profile
Reply by a searcher
from IMD in Lausanne, Switzerland
Hi Xavier, you could research past deals in Spain or check with investment banks what % they have been financing. In my understanding, most PE and search funds aim at 30-50% of debt and depending on their debt service coverage ratio (DSCR).
The investment bank I'm working with told me they use an ultra-conservative model (projecting historic, industry or no growth and apply the same EBITDA %) and with those projections they calculate how much debt they would be willing to provide.
commentor profile
Reply by an member
from Colby College in Waterville, ME, USA
Looking to get into the buisness, thanks for insight
Join the discussion