The relationship between entrepreneurs and middle market private equity remains complex. Many executives experience a natural resistance to opening their companies to external investors. However, recent data shows that this perception needs to be updated.
The SpainCap 2025 report reveals growth patterns that contradict many long-held beliefs about private equity. We are witnessing a structural transformation that is redefining how medium-sized companies grow in Spain. The evidence is compelling and deserves detailed analysis.
Middle market private equity drives real growth in employment and turnover
The report’s findings exceed even the most optimistic expectations. The 251 companies analysed that received middle market private equity generated 79,778 additional jobs during the first three years. This annual growth of 18.2% contrasts significantly with comparable companies that did not access this financing.
The difference is sustained over time: by 2022, cumulative employment growth reached 87%. These are not temporary or artificial hires, but rather sustained expansion reflecting greater operational capacity.
In terms of turnover, the advantage is even more pronounced. The investee companies improved sales almost eight times more than the control group during the first three years. Translated into concrete figures, we are talking about increases of around €20 million per company.
These figures are in line with the sector’s superior performance. Private equity currently doubles the performance of the IBEX 35 and exceeds the Euro Stoxx 600 by more than 50%, demonstrating the structural strength of this type of investment.
In addition to liquidity, middle market private equity provides operational expertise, international commercial networks and management methodologies that few companies develop internally. This combination explains why the results transcend the mere financial effect.
The benefits of middle market private equity are sustained over the long term
A frequent concern among entrepreneurs is the long-term sustainability of these benefits. The data categorically dispels this uncertainty.
The companies in which investments were made reached 106,668 employees, confirming that growth does not slow down after the initial period. On the contrary, it consolidates and expands, creating a more solid foundation for future expansion.
Total assets show similar patterns. Companies recapitalised by middle market private equity show much higher growth in efficiency and investment capacity compared to companies without this financing. This improvement in the equity base facilitates access to new markets and growth opportunities.
Gross margins also experience sustained improvements. This is not only due to higher sales, but also to more efficient operating structures that transform revenue into margins more effectively.
The industry faces 2025 with particularly favourable prospects after a period of consolidation in which managers focused on optimising their existing portfolios. Indicators suggest a very positive year for all relevant metrics.
This stability is particularly valuable for companies seeking sector consolidation, preparation for external shocks, family succession processes or structured international expansion.
When to evaluate middle market private equity in your company
The decision to access middle market private equity requires careful assessment of the timing and business circumstances. Certain criteria can guide this reflection.
Your company is in a favourable position if it has a turnover of between €10 million and €100 million, which is the typical range for the middle market according to SpainCap data. You also need transparent financial management, with audited financial statements and clear metrics to measure performance in terms of sales, margins and assets.
Expansion is another determining factor. If your company is seeking internationalisation, geographical diversification or product line expansion, middle market private equity significantly accelerates these processes. The same applies when the competitive environment demands scalability and professionalisation to maintain competitive positions.
However, certain mistakes can compromise the process. Many companies underestimate the effort required for preparation: inadequate documentation, lack of clear objectives or inconsistent metrics.
Another common mistake is not adequately valuing the investor’s non-financial contribution. The operational management, network of contacts and international strategy provided by specialised managers can be more valuable than the capital itself.
It is also counterproductive to negotiate without clarity on the level of control you are willing to transfer. Worse still is focusing exclusively on liquidity for existing partners rather than on medium- and long-term value creation.
The macroeconomic context is particularly favourable for these transactions. Interest rates will continue to fall gradually throughout 2025 until they stabilise at around 2%, where they will remain in the medium to long term. This scenario boosts transactions in private markets.
Confianz accompanies companies in this strategic assessment. Our approach diagnoses financial maturity, optimises corporate structure and prepares negotiation conditions that preserve business control while maximising the impact of middle market private equity. This specialised support avoids the most frequent and costly mistakes in the process.