Jaume has been investing in entrepreneurial acquisitions in Europe since 2020. He is now launching Inveready Searchers, a new fund of search funds and other entrepreneurial acquisition vehicles.
To make it easier for you to read this article, we suggest downloading it in PDF format.
How did you become acquainted with search funds?
I first learnt about search funds in 2006 from Prof. Rob Johnson. Back then I was working at IESE’s Entrepreneurship department after finishing my MBA. Prof. Johnson knew the model well in the US and was trying to foster search funds in Europe.
Why didn’t you get involved in them?
I considered that shortly, but I concluded I did not have the necessary experience to be a searcher, so I developed my professional career in industry first and then in asset management. I worked for many years as corporate development director at a 10,000-person strong automotive Tier I supplier in crisis, which we ultimately stabilized. Then I became an advisor for wealthy families and individuals, mostly managing financial and real estate investments.
How did you go back to search funds?
One of the families I advised liked real companies and investments, compared to purely financial assets. By then, search funds were already gaining traction in Europe, so I proposed to develop a direct strategy in search funds. They accepted and we started investing in entrepreneurial acquisitions. I invested in the first search fund in 2020, my first acquisition in 2022 and my first self-funded deals in 2025.
We interviewed you some years ago while investing from a family office. What has changed since then?
The family decided to prioritize other investments in spring this year. By then I had already invested more than €1 million in searchers and more than €7 million in acquisitions, with the family office, personally, or with other families. After thoughtful consideration I concluded that searchers were the most interesting part of my activities. Hence, I reached an agreement with them to acquire the search funds in the search phase.
How was the process that led to launch Inveready Searchers?
I have been an LP in different Inveready funds since 2014. They are very good asset managers, prioritizing carried interest and and aligning their interests with LPs. Inveready has been very innovative in alternative assets, opening new strategies ahead of the rest, and ultimately successful in financial returns. Due to this success, they have reached €2.7 billion in assets under management in less than 20 years, growing by recycling returns from previous funds.
Inveready had been considering search funds for a while and some of their LPs were also asking about it. Thanks to the purchase of the search funds, we have a deal flow of transactions and a pool of searchers, which minimizes the J-curve for a new fund. We estimate we are shortening the process by one or two years. We are starting the fund with two acquisitions and expect to close others shortly from our own pool of searchers.
Why did you believe there was room for another search fund investment platform?
In our case, we were already in the market under another name, so in a way, we are not another search fund investment platform. In any case, the market is growing so there is a need for more investors and acquisition multiples have not grown significantly. Besides, Inveready brings a unique combination in this market. First, during its 20 years of experience in VC and other alternative asset classes, it has unparalleled expertise in structuring transactions. Second, Inveready’s LP base is made up of families that, we believe, would be interested in co-investing which gives us additional firepower and expertise. Finally, Inveready has sound expertise and track record in sectors like software and life sciences that are more difficult to analyze.
Can you elaborate on that?
Inveready has a long track record of analyzing and structuring transactions in VC and in PE. In this regard, we can help searchers on the acquisition phase and in inorganic growth. Furthermore, we have direct experience of how difficult it is for family offices to invest in searchers: they need to develop a network in the asset class, and that takes time. And on top of that, a team of professionals to close and follow up investments. The amount of time devoted to following a €10 million financial portfolio is limited. The same €10 million in real estate is more time-consuming, but nothing compares with the people, skills and knowledge needed in-house to follow up €10 million in direct investments. Consequently, many family offices are interested in the asset class, but very few invest in it.
Inveready Searchers is raising €20 million from LPs with a majority of €1 million tickets committed by families. The plan is to be the best partner for family offices entering the asset class, by offering them co-investments in acquisitions and advising them on continuity vehicles. The market is maturing and there are starting to be several cap tables in which some investors from the initial acquisition want to leave.
Where are you in the fundraising?
Inveready obtained regulatory approval for a €20 million fund on July 24th and the funds were acquired on the 27th. Since then, we have already received a sizable part of hard commitments from Inveready LPs. We expect to have the first close in September and the final close in December.
How do you see the European market evolving and what role Inveready wants to play in that development?
The European market is one for investors, but a fragmented one for searchers, made up of national markets moving at different stages. Clearly Spain is the most advanced market and therefore a good proxy of what can happen in the rest. Search funds took off slowly there around 2015 and I would say they reached a growth crisis in 2024. We even saw press articles saying that the model had reached its limits. That has proven incorrect, as Spain recovered from that crisis in 2025 and acquisitions and exits reached historical levels. Markets such as Italy, France, or Portugal are now taking off as Spain did in 2020. The UK is a very competitive market with horrible borrowing costs, but still very good searchers and deals. Germany is now booming with many independent sponsors and local investors.
It is important to take note of the fragmented nature of the European market also at company level. For example, many searchers are launching consolidation vehicles copying the playbook of Swedish compounders. This is dangerous. If you believe a small business in Italy is managed with the same formality as in Sweden and can be consolidated as easily, you are in for a surprise.
Many investors agree that there was a bit of a slump in search funds in Spain in 2024, which was then recovered. What is your analysis of that?
When search funds took off in Spain, it was relatively easy to search and acquire. A searcher could download financial data for all SMEs and apply the standard criteria. Without doing much one would identify 300 companies that fulfilled most criteria. Even better, no one had called those companies before, so conversion was high. One had to explain what a search fund was but the advantage was huge. With more searchers in the market, those low-hanging fruit companies became over-contacted.
Some searchers have kept trying what had worked before and achieved no results. Others instead started to develop more elaborate techniques, such as contacting small accounting firms that could have interesting transactions or screening for dividends paid as opex. The number of interesting SMEs available in Spain is much larger than 300, it’s just not as easy as it used to be. All in all, the growth potential is huge and the bottleneck is the availability of great searchers, not of SMEs. Gradually the rest of the national markets will get through this point.
What, in your opinion, are the main trends to watch now in the European market?
I would mention four: the rise of self-funded search, the slow return of software investments, the declining motivation of searchers, and the macroeconomic environment.
First, self-funded is growing now much faster than traditional search funds. A recent working paper by the Institute for Private Capital has screened more than 800 transactions from independent sponsors in the US with an average IRR of 29%. That is a huge opportunity for investors, mostly invisible due to the lack of studies in that segment. We plan to allocate up to one-third of the fund to self-funded searchers. That forces us to devote extra time to structuring the transaction; in traditional search funds a big part is predefined but in self-funded you need to start from scratch. As mentioned, I believe Inveready has the skills needed to create value there.
Second, software transactions have collapsed due to AI but are now starting to come back at more reasonable multiples. In these deals you bet on growth, contrary to more defensive ones in which you mainly bet on debt repayment. Nevertheless, there are many businesses in software that do not risk immediate disruption. Inveready’s experience in VC will help us in screening those.
Third, in my opinion searcher motivation is becoming an issue. On one hand, the model has become well-known now. On the other hand, management consulting and investment banking firms have reduced their hirings. As a result, you have many potential searchers who approach the model due to the lack of alternatives and without strong motivation.
Finally, the macroeconomic scenario in Europe is stagnant. That means we cannot expect that the general environment will lift any type of business and force us to be more restrictive. However, there are interesting trends to follow, such as reindustrialization or defense. We also need to keep an eye on interest rates, which continue to be one of the main pillars of value creation in the asset class.
Why is motivation so important?
I was at an IESE class in July with students. We discussed the criteria for screening good searchers. Students considered the main criteria were motivation and business ethics, and I agreed with them. Nevertheless, none of us could come up with an effective way to assess those.
Search funds and self-funded search are extraordinary paths to equity, but they are long and tough. SME management is the opposite of what is taught at business schools. There are small problems and multiple partial solutions instead of case studies. It is important that searchers prepare themselves for this.
I have worked in industrial companies like this, facing a shortage of resources, liquidity crises, tough customer and supplier negotiations, and still, you must find the strength to motivate yourself and the team. It is relatively easy to survive one month like that; the difficult part is going on for several months or even years.
The model is advertised as safer than start-ups. In terms of financial returns this is true, but this should matter only to investors, not to searchers. The problem for the searcher should be opportunity cost rather than returns on someone else’s money: being stuck on the wrong track for years. Looking at it this way, the good point about start-ups is that you fail fast. Relative failure in search funds can last for years.
What changes do you anticipate in the market?
We believe the rise of institutional funds will lead to a segmentation of the market between a VC and a PE model of investing. Historical investors continue to apply a VC model; €10 million enterprise value deals, diversification, minority positions, don’t get too involved, and try to get a superhit on board, the so-called “spray and pray” model. On the other hand, big funds are experimenting lately with applying a PE model to search fund investing: €20 million enterprise value or more, concentrate money in a few investments, more active involvement.
Both strategies are legitimate and have strengths, but the PE model will take you head-to-head with traditional private equity funds. The space there is limited, there are fewer target companies, there will be more competition for deals and you need to buy cheaper than PE to accommodate for searcher dilution.
The smaller segment has more potential, there are more SMEs, less competition from institutional money, more collaboration between investors, and lower valuations. But one needs to be lean to take advantage of it. It is also true that given the distribution of returns maybe you don’t need to “spray and pray”. Outliers are very nice but most outcomes are clustered around a more than acceptable average. We plan to be in both subsegments in an opportunistic way.
Another change will concern boards. In my opinion, boards now spend too much time discussing the last quarterly results and add-ons and almost no time looking at unit economics and considering whether the company should increase prices or salaries by 5%, or managing risk. We also need to find a way to onboard directors with sector expertise, maybe through business schools alumni networks.
What kind of searchers are you looking for?
We like all the usual indicators, such as a top MBA or corporate finance experience. However, we prioritize operational experience. One must have led people and managed a P&L. The ideal criteria are motivation and business ethics, but we still don’t have a great way to screen for those.
At the end of the day, we are looking for a partner. Entrepreneurial acquisitions align searchers’ and investors’ motivations, but there are moments when this alignment comes under pressure. The weeks before the acquisition are difficult. The decisions on the investment risk profile are too. For example, searchers have a bias towards add-ons since they will enjoy the upside but have limited downside compared to investors. Investors might be too conservative sometimes. All in all, there must be a good dialogue.
We are looking for people with whom we can debate these issues with and ultimately reach a better conclusion together.
