Venture Capital & Private Equity firms remain cautious with portfolio turnover. Economic and geopolitical uncertainty, higher interest rates and the mismatch in price expectations by sellers and buyers of companies are significant factors that delayed divestment processes in 2023. As a counterweight to this dynamic, fund managers placed a particular focus on supporting their portfolio of investees, waiting for more suitable conditions for sale. Continuation and secondary funds were some of the means used to continue promoting the growth of portfolio companies. To the extent the current complexity of asset valuation is reduced thanks to the stabilization of the factors that are marking the economy and geopolitics, divestments will necessarily see a resurgence. In 2023, the sales of investee companies (at price cost)1, across all Venture Capital and Private Equity firms totaled €1,361.7M, representing a 30% decrease from the volume recorded in 2022. This decrease was directly related to final divestments, totaling €764M (-57.5% compared to 2022), while partial divestments increased by 290.5% to €597.7M. In total, 316 divestments were recorded (-28%) compared to 439 in 2022. Of these, 207 (-39% compared to 2022) were classified as total divestments and 109 (+9%) as partial. In Europe,2 divestment activity also suffered, with a 22% drop in volume and a 13% drop in the number of divestments compared to the previous year. 89% of divestment volumes arose from Private Equity transactions (€1,207M), whereas 72% of divestments were made in Venture Capital transactions. By type of entity, divestment was led by international GPs with €810.8M in 2023, 33% lower than the previous year, across 24 divestments (15 less than the year before). Private domestic GPs completed divestments totaling €490M (-18%) in 147 divestments (-32%). Lastly, public domestic GPs also reduced their divestments by both volume, totaling €60.8M (-57%), and number of investments, with 145 in 2023 compared to 184 in the previous year. The sector with the highest divestment levels in 2023 was IT (97 exits, representing 30.7% of total), followed by Industrial Products and Services (37; 11.7%) and Consumer Goods (33; 10.4%). By volume divested, the following sectors stood out: Industrial Products and Services (€318M, representing 23% of total volume), followed by Consumer Goods (€285M, 21%), Healthcare (€183M; 13%) and Hospitality / Leisure (€123M; 9%). The average holding period for the portfolio was 5.8 years (in terms of total divestments), one year less than in 2022, the lowest average figure since 2020 (5 years). This decrease was influenced by the 29 divestments through write offs and the 17 industrial trade sales of companies that had been held in the portfolio for 4 or fewer years. Some of the main divestments in the Private Equity sector in 2023 were headed by, inter alia Anacap in Gestión Tributaria Territorial, Portobello in Trison, Fremman and Corpfin in Palex Medical, Corpfin in Grupo 5, Magnum in Agrupapulpí, Aurica in Winche, Ardian in MKD, Trilantic, MCH and GPF in Grupo Pachá, ProA in Amara, Nazca in Caiba, in Diater and in Eurocebollas, Moira in GreenE, Quarza and Gaea in Grupo Hispamoldes; or Sherpa in High Tecnology Masterbatches. The following Venture Capital divestments stood out: Asabys in Psico Smart, Cathay in Wallbox, Repsol EV in Ampere, 4Founders, KFund and All Iron in Wide Eyes Tecnologies, Amadeus CP and Sodena in Openbravo, Bankinter Capital Riesgo, KFund and The Valley Ventures in Lernin, Caixa Capital Risc, Ona and BStartup in Worldcoo, Elaia and Nauta in Geoblink, Caixa Capital Risc and Venturcap in Travel Compositor, Iberdrola (Perseo) in Balantia; Caixa Capital Risc in Xtraice, among others. Divestment by type of Private Equity & Venture Capital entity (GP) Domestic public GP Domestic private GP International GP Source: SPAINCAP/webcapitalriesgo 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 6,000 5,000 4,000 3,000 2,000 1,000 0 € Millions Divestments Notes