Vinca Capital

Mes: junio 2020

  • Javier Navarro: «We take advantage of the confinement to review the strategy»

    Javier Navarro: «We take advantage of the confinement to review the strategy»

    Javier Navarro, managing partner of Vinca Capital Corporate Finance, is the guest in the new installment that this newspaper launched two months ago, in order to to find out how Valencian financiers have lived through the state of alarm.

    Navarro kindly answered the call from Valencia Plaza to address other aspects such as the performance of the financial markets, the economic recovery and his vision of the so-called ‘new normality’. Here is the talk:

    -How have you been during these months of confinement?
    We have experienced an unusual and complex situation. At first you go into shock, trying to understand the problem; then we go to a phase of adaptation to the limitation of movements; and for a few weeks we have been in the reconstruction phase, as we recover freedoms.

    -And how have you organized yourself to continue at the foot of the canyon?
    -Following very specific guidelines for schedules, food, sports… A little daily self-discipline that has allowed us, despite being confined, to clearly differentiate working time from spending time with family and leisure.

    -How has Vinca Capital responded to the health crisis?
    -We have tried to keep in continuous contact with our customers and partners. Fortunately, today, new technologies allow teleworking and undertaking most tasks in the financial area. In addition, we have taken the opportunity to become part of the team, taking an online course at ESADE on Agile Business, which has allowed us to review our strategic commitment.

    -Have you received many calls during this time, especially after the first weeks with the market crashes?
    -In general, customers have understood the situation and have remained calm. We have issued several analyzes with our opinion on the market situation, which in addition to communicating it to our clients, we have made them public and shared on our website and on social networks.

    -What recommendations have you given them?
    -The measures adopted have been varied: we have increased liquidity a little, we have increased exposure to sectors with little exposure to covid-19, such as the technology sector and the pharmaceutical sector; We have sold futures on the Ibex to partially cover the portfolios. At no time have we made crazy sales, because we trust the quality of our analysis system. We have also taken advantage of some opportunities, for example, we doubled our bet on MásMóvil a couple of weeks before the takeover bid for KKR, Providence and Cinven was announced. We have also modified the prospectus of the investment fund Fundamental Approach Spain to make it international.

    -Where are the declines in the stock market going to stop after the measures adopted by the big central banks?
    -The declines have already stopped weeks ago. In the case of the S&P 500 we have experienced the fastest decline in history, followed by the fastest recovery. It is the first time since the crash of 29 that 85% of the drop has been recovered in less than 80 days. The Nasdaq offers positive returns of +10% for the year and the S&P 500 is positive. The European markets, somewhat lagging behind, offer very good opportunities.

    -Do you see a strong economic recovery once the ‘coronavirus effect’ passes?
    -Depends on countries. In the United States the recovery is being brilliant: a ‘V’ clearly. The published macroeconomic data has surprised positively, with the creation of 2.5 million jobs in the month of May, the rebound in manufacturing production and an increase of 18% in retail sales.

    -And the economic recovery in Europe?
    -It will be quite fast in the form of a ‘U’ to put a simile), but we have to say that Spain will be one of the countries that will find it hardest to recover. We expect Spanish GDP in 2020 to be -9.6%, unemployment to reach 21% and the public deficit 11.1%. We will not fully recover until the end of 2022 and much depends on the measures taken by the Government.

    -What awaits us in the ‘new normal’?
    -In Spain, unfortunately, we are going to find a greater intervention of the public sector, more regulation of economic activity, greater social conflict and an increase in all kinds of taxes. Fortunately, the financial sector is being part of the solution, unlike the 2008 crisis.

    -And

  • ¿Qué son los Carve-Out? ¿Ha llegado su momento?

    ¿Qué son los Carve-Out? ¿Ha llegado su momento?

    La irrupción del Covid-19 y las medidas adoptadas para controlarlo han dibujado un nuevo escenario a nivel económico y han supuesto la revisión de los planes de negocio diseñados para estos años.

    Las Compañías han abandonado sus objetivos de crecimiento y se han centrado en la supervivencia, siendo la liquidez y la financiación el principal foco de atención. La caída de la demanda ha supuesto, para la mayoría de los sectores, una reducción drástica de los ingresos a corto plazo y escasa visibilidad de los mismos a medio plazo. Las Empresas han puesto el foco en la gestión de circulante, la reducción de costes y el apalancamiento financiero, muchas veces a través de los préstamos ICO.

    En este nuevo entorno económico, los Carve-Out se plantean como una alternativa muy interesante para las Compañías. Los Carve-Out consisten en la segregación de unidades de negocio, participadas non-core o Activos no fundamentales de la matriz. La desinversión y monetización de activos permite a las Compañías centrarse en su actividad principal y destinar dichos recursos a la reducción del endeudamiento o a CapEx.

    Estas desinversiones industriales responden a cuatro estrategias:

    1. Dar visibilidad al valor de un Activo
    2. La necesidad de desapalancar la Compañía
    3. Desprenderse de un negocio con poco encaje estratégico
    4. Oportunidad de crecimiento con un nuevo socio

    Los Carve-Out no sólo tienen un sentido económico, sino también estratégico ya que permite al equipo directivo centrarse en las principales áreas de negocio. Estas operaciones suelen estar protagonizadas por grandes compañías multinacionales que deciden centrarse en mercados y negocios más operativos. También es una tendencia natural en ciertas Compañías como Sacyr, ACS o Ferrovial el rotar la cartera dentro de su estrategia de desprenderse de negocios maduros.

    Han sido una práctica habitual en sectores como el de las Telecomunicaciones, donde han aparecido tenedores de infraestructuras que subarriendan los activos a los operadores móviles, permitiendo a estos últimos un incremento en el CapEx para la llegada del 5G. El sector financiero ha sido otro de los protagonistas, los bancos han vendido carteras de non performing loans, gestoras de activos, y participadas en el sector inmobiliario para centrarse en la actividad puramente bancaria.

    En los sectores más afectados por la crisis (turismo, restauración, automóvil, ocio) se va a producir una concentración acelerada, por lo que habrá más fusiones y desinversiones de lo habitual. Estos procesos de desinversión, van a suponer una ventana de oportunidad para el Capital Riesgo.

    Las necesidades de tesorería de las Compañías coinciden en un momento en el que los fondos de Private Equity disponen de 4.000 millones de Euros de “pólvora seca” – dinero comprometido y listo para ser invertido. Casi el 70% de las operaciones corporativas son protagonizadas por este tipo de gestoras. Es por ello, que la industria de Capital Riesgo se plantea como una parte de la solución ante el nuevo escenario económico.

    Por Javier Navarro Enguídanos, Analista en Vinca Capital Corporate Finance

  • What are Carve-Outs? Has your time come?

    What are Carve-Outs? Has your time come?

    The outbreak of Covid-19 and the measures adopted to control it have drawn a new economic scenario and have led to a review of the business plans designed for these years.

    Companies have abandoned their growth objectives and have focused on survival, with liquidity and funding being the main focus of attention. The fall in demand has meant, for most sectors, a drastic reduction in revenues in the short term and little visibility of them in the medium term. Companies have focused on working capital management, cost reduction and financial leverage, often through ICO loans.

    In this new economic environment, Carve-Outs are considered a very interesting alternative for Companies. The Carve-Outs consist of the segregation of business units, non-core investees or non-core assets of the parent company. The divestment and monetization of assets allows the Companies to focus on their main activity and allocate said resources to reduce debt or CapEx.

    These industrial divestments respond to four strategies:

    1. Give visibility to the value of an Asset
    2. The need to deleverage the Company
    3. Get rid of a business with little strategic fit
    4. Growth opportunity with a new partner

    Carve-Outs not only make economic sense, but also strategic since they allow the management team to focus on the main business areas. These operations are usually carried out by large multinational companies that decide to focus on more operational markets and businesses. It is also a natural tendency in certain companies such as Sacyr, ACS or Ferrovial to rotate the portfolio within their strategy of disposing of mature businesses.

    They have been a common practice in sectors such as Telecommunications, where infrastructure owners have appeared that sublet assets to mobile operators, allowing the latter an increase in CapEx for the arrival of 5G . The financial sector has been another of the protagonists, banks have sold portfolios of non-performing loans, asset managers, and investees in the real estate sector to focus on purely banking activity.

    In the sectors most affected by the crisis (tourism, restaurants, automobiles, leisure) there will be an accelerated concentration, so there will be more mergers and divestments than usual. These disinvestment processes are going to be a window of opportunity for Venture Capital.

    The cash needs of the Companies coincide at a time when the Private Equity funds have 4,000 million Euros of “dry powder” – money committed and ready to be invested. Almost 70% of corporate operations are carried out by this type of managers. That is why the Venture Capital industry is considered as part of the solution to the new economic scenario.

    By Javier Navarro Enguídanos, Analyst at Vinca Capital Corporate Finance