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

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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.
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Reply by an member
from Colby College in Waterville, ME, USA
Looking to get into the buisness, thanks for insight
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