Experiences with Hybrid Search Funds in Europe or Latin America?

November 04, 2025

by a searcher from IESE Business School in Barcelona, España

Hi everyone, I’m exploring hybrid Search Fund models — structures that blend elements of the traditional search with more flexible, deal-specific approaches. I’d love to hear from searchers or investors who have seen or implemented similar setups, particularly in Europe or Latin America. Specifically: – What kind of investors tend to support these hybrid models? – How have you managed the due diligence process and budget — was it investor-funded, reimbursed at closing, or self-funded with later recovery? – Have you seen cases where the search evolved into a small investment platform after the first deal? Any examples, lessons, or insights on governance, alignment, and investor relations in these setups would be greatly appreciated.

Reply by a searcher
from ESADE in Barcelona, Catalonia, Spain

Hello Edgar, Let me try to help based on the insights I’ve gathered from speaking with over 40 searchers while setting up my own Search Fund. I understand you’re referring to a model where equity is raised directly for the acquisition of a company. Regarding your questions: - Investors: The investors who support these hybrid models are generally the same as in a traditional search, since you approach them with a live deal in hand. However, these setups can also attract other types of investors who are less common in traditional searches, such as family offices. - Due Diligence Financing: From the experiences of other searchers pursuing similar approaches, funding the due diligence phase often becomes the main bottleneck. Some raise specific capital for DD, some finance it themselves (self-funded), and others roll those costs into the acquisition price. - Evolution into a Platform: Yes, I’ve seen a few cases where this model evolved into a small investment platform after the first deal. Happy to chat and share more details if helpful. I also hope other searchers can chime in and share additional context or perspectives on this topic.

Reply by an intermediary
from Universidad Complutense de Madrid in Spain

Hello Edgar, my knowledge is limited here, but it seems you are talking about independent sponsors where the sponsor takes the management role. I do like those models, but it is likely you willl need to finance the search yourself.

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