Would you set up a combined US & Spain (or Europe) search fund?

February 18, 2021

by a searcher from IESE Business School in Barcelona, Spain

I have hands on relevant experience in both countries US and Spain. If expanded to Europe I've worked in Spain and Germany in particular.

I see advantages to define such a broad region given the breadth of spectrum that it opens up, but the back side is the loss of focus. It also opens up additional questions, where to incorporate? Any thoughts about where it's better, US or Europe?

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Reply by a searcher
from Miami University of Ohio in Barcelona, Spain

Hey Arnau, I'm based in Barcelona. Happy to chat with you. I'd say as a traditional search it would be really hard to get funded that way (based on the criteria traditional investors I know have). I look across Europe and the US, I find the US is more efficient (also more expensive). Europe is also quite expensive for the value many of the businesses have.

If you are willing to do it on your own funding, it's worth taking a look. Spain has some value issues as most brokers try to sell you a factory for the price of gold. They claim it's because the owner is very "proud". There is also the issue with Salaries in Spain. It is cheap to hire a CEO to take over your family business, rather than sell it comparatively to the US. I could hire a CEO for 90K€/year and go to the costa brava.

Reply by a searcher
from National University of Ireland, Galway in Seattle, WA, USA

Your top goal is to find the best business to operate and create value. The synergy of finding a European busines that is underdeveloped in the US market is a potential gem. Use the superior global business case to help investors get over their location fears. This advice only makes sense if you are interested in building an international business. If you want to stay local then do that and stay where you are.

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