Talenta’s strategy in private markets: generalist exposure and niche segments

Back in 2009 Talenta Gestión was born, a project backed by a team of professionals who were also partners of the company. It did so as a Securities Agency. In 2021, it obtained the management card, allowing the entity to expand the services it provides to its clients by being able to set up its own investment and venture capital funds. Its management capabilities were strengthened last year when it received authorization from the CNMV to manage European and global private equity funds and companies.

The services provided by Talenta Gestión in private markets have been consolidated with this expansion of functions, reaching a volume of 235.56 million euros in these assets at the end of 2023. One of its lines of business is mandates in private markets, tailor-made portfolio proposals for high net worth investors. "We currently have 80 funds under this service," explains Jordi Jofre. Jordi JofreJordi Jofre, president and partner of the entity, selected under an open architecture model.

In addition, as a management company, they have launched their own vehicles with different casuistry. Of the 14 they have, the oldest is Siroco Capital, SCR, a company that invests mainly in wind farms with a total of 22 investees and allows the generation of cash flow through the payment of dividends.

"The sector where we have the largest volume is in technology, which accounts for 70% of our alternative investment assets," he says. Exposure is through two channels. The first is the range of venture capital funds of funds focused on the seed phase, which began to be launched in 2016.

The second is through venture capital funds. Here they collaborate with "professionals who have been successful in the venture capital world, launching author vehicles to continue their investment activity". The structures are SCR, FCR and, increasingly in the entrepreneurship ecosystem, the new FCRE modality. Vehicles such as Barlon Capital (of Javier Rubió), LifeX Ventures (of Iñaki Berenguer), Yellow (of Oscar Pierre and Sacha Michaud), Solón Inversiones (of Bernando Hernández) or Secways Ventures(Pere Hospital). "We are preparing the launch of three more funds. We are leaders in this type of services," says Jofre.

"Everything that invests in venture capital is structured through FCRE."

He highlights the positive evolution of European Venture Capital Funds: "Everything that invests in venture capital is structured through this figure," explains Jofre. There are a number of advantages for those launching these funds, including the fact that they can be set up from 60,000 euros (and go to the market with the fund already established) and with no minimum diversification requirements. "They are dynamic and agile structures. We see that everything that is venture capital is moving to these figures that provide flexibility for smaller initiatives," he adds.

Its range of proprietary funds is complemented by two more general private equity funds of funds.

Liberal Offer

This service offering addresses what Jofre sees as the hallmark of his strategy: combining a global approach to private equity with more specialized exposures in technology and renewables. "We are very liberal. We offer access to the generalist market by adding exposure to niche markets. This has allowed us to grow to significant levels without the support of any group behind us," he explains.

"We offer access to the generalist market by adding exposure to niche markets."

The team consists of six people in the team, but "at the same time we have external advisors (Manuel Jaffrin, Pep Gomez, Pere Vallés, president of Exoticca) and all the professionals behind the author funds. In private equity we also have Pedro Domech advising us," he explains.

Market distortion

The evolution of the industry is strongly conditioned by the business strategy of the banks. "In Spain, everything goes through the banks. They have the democratization of investment in private markets in their hands. The moment they start distributing it among their clients, this asset is already democratized," he points out. As for the minimums from which it can be accessed, he is skeptical that the 10,000-euro tickets will be extended: "In practice, there are few entries", since to go below the 100,000-euro level it is necessary to meet certain minimum requirements that limit its adoption, notes Jofre, who also maintains that the CNMV is not very much in favor of extending this reduction.

"Banks have in their hand the democratization of private markets."

In his long-term view of the industry, he expects to see an increase in the allocation to these assets, especially when compared to U.S. investors. However, he expresses concern about the investment itself. "The dispersion between managers who do well and those who don't is large. The question today is whether there are enough good professionals to achieve attractive returns in all the vehicles that have been launched," he says. "Three to five years from now we will see big failures."

From the investor's point of view, he points out that "people don't know the risks they are taking. We see portfolios with inconsistent exposures and that they have been poorly advised."

"The dispersion among managers is great. 3-5 years from now we will see big failures."

Market environment

Any reflection on what is happening in the private equity and venture capital market today harkens back to a past of abundant central bank liquidity. "Going against 0% yields has been very easy," he notes. With the rise in rates, "the environment has become more difficult," both for corporate activity and fundraising. Now "there is a moment of consolidation. As interest rates come down, alternative investments will become more attractive again. Activity will be reactivated, but we will have to digest a lot of barbarities," he warns.

His plans for the future are based on a strategy of "doing as opportunities arise," he says. He defines Talenta as an independent player compared to the "big banks that have been more focused on distributing product. Our growth is being significant, and it will depend on finding investments, not on setting a target of assets to be reached.