Luis Seguí, founding partner & CEO at Miura Private Equity, discusses how the private equity firm is working with investments in Spain, one of the countries being hit the hardest by Covid-19.

How is COVID-19 impacting your firm? 

Spain is one of the countries where covid-19 is impacting the most. Drastic social and business measures are being applied, including a total lockdown except for basic activities such as healthcare and food supply.

The unexpected rise of the virus has put PE firms in emergency mode. We have made sure that all employees from Miura and our portfolio are perfectly safe, and strict health protocols have been applied. In addition, we have focused our efforts to protect our companies from Covid-19 and ensured that they are in the best possible shape to go back to normal when the current situation is over, hopefully in the next few weeks or months. 

There will be several battles against Covid-19. As soon as we overcome the pandemic, we will tackle the business battle. Companies are a key part of our economy and society, and we will need them to create jobs and to give people the possibility to both have a monthly payroll and professional development in their respective fields.

What measures has the business put in place?

From a health and safety point of view, the entire firm is working from home. Given the nature of our business and our experience with cross-border deals and globalized portfolio companies, we already were using remote communications on a regular basis. Thus, we were already digitally prepared to continue with our business without any disruption.

From a business perspective, we reacted quickly, preparing contingency plans for all our companies, including critical areas such as human resources and labour, customer management, operational optimization under the new scenario, liquidity and financing.

We have also asked our companies to help our community by all means. Our food companies are donating fresh food to hospitals and our education company has uploaded plenty of contents online for free, to help teachers and parents continuing on children’s education during the lockdown. At Miura, we have made a donation to one of the most important public hospitals in Barcelona to help them purchase more sanitary supplies and support scientific research. It is time to apply a global and complete sense of responsibility.

How have your communications with GPs/LPS/advisors been affected?

We are extremely active in our communications with our LP’s, sending them weekly updates from our portfolio companies including all the measures taken. We are also speaking one to one with most of them to explain in detail the situation and what we are doing to manage it.  

I should admit that our LP’s reaction has been outstanding. They are supporting us in all our decisions and reinforcing their commitment with Miura over the long term.

How are you managing your portfolio?

Last week I sent a video to all Miura employees reinforcing four key concepts that we need to focus on and reinforce during these challenging times.

Communication: during the lockdown, we should over communicate more than ever. Our teams and our companies need to feel that we are there, helping and supporting them. They lead and run businesses, but more importantly, they are human beings that need guidance and need to be heard.

Responsibility: it is time to show our ownership more than ever, along with a sense of urgency, since many important decisions can’t wait.

Globalisation: think across the board. What we do for one company can be applied to others. What we learn from one company can help other companies to navigate through these uncertain times. Stay alert and go beyond our normal duties.

Long term view: and above all, never forget the fact that we are long term investors. We  develop projects over periods from five to seven years, which means that we are used to facing many unexpected events. We successfully overcame the difficult financial crisis in 2008/ 2009 and subsequent years, specifically by applying buy-and-build strategies across the portfolio.

And equally important, they are also being inspiring leaders and human beings, helping whenever they can and making efforts beyond their limits. In complex moments like this, we can really see our true selves and what we are really made of.

How will the virus impact the PE landscape across Europe?

The PE industry has proven to be very resilient, even contrarian, in times of downturns and crisis. Vintages in 2021 and 2022 could benefit from attractive entry valuations and build solid portfolios for the long term. The asset class will keep growing, and it will benchmark very positively vis a vis public markets and real estate, given its more patient nature and longer term dynamics.

Naturally, there will be some negative effects, specially for those GP’s currently fundraising, and also for those older unrealized portfolios that will need longer holding periods to deliver potentially lower returns than expected.

Overall, once Covid-19 is under control, the PE industry will play a key role in recovering our businesses and economy.