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In the early years of your career you played multiple roles in your family business. How did this experience shape your approach to entrepreneurship, and could you share more about your first ETA journey with Aioli Bistro?
Growing up, I had the privilege of observing my father, who managed multiple businesses throughout his life. His relentless drive and entrepreneurial spirit inspired me to start working from a young age. At 16, I joined his software business, which specialized in setting up and maintaining large database systems, as a programmer. Within a few years, I was leading technical projects and managing software implementations for clients across Brazil. This hands-on experience taught me not only the intricacies of technology but also the importance of meeting client needs with precision and agility.
Simultaneously, I was involved in our family’s publishing house, which grew to employ over 150 collaborators, as well as in the launch of two retail stores in Rio. These diverse ventures provided me with a broad understanding of different industries and the operational challenges within them. Each role was a stepping stone, offering lessons in resilience, adaptability, and leadership. I also learned to prioritize key elements such as cash flow management, cultivating strong relationships, and building structures that foster both discipline and creativity.
After completing my MBA in Europe, I felt a strong pull toward entrepreneurship, particularly through the lens of SMEs. My first EtA experience came unexpectedly when a friend presented an opportunity to acquire a restaurant in one of São Paulo’s most prestigious neighborhoods. At the time, I was saving to purchase my first property, but the idea of acquiring and growing a business resonated deeply with me.
Taking over the restaurant, Aioli Bistro, I adopted a “buy and build” strategy, focusing on refining operations, enhancing the customer experience, and leveraging the restaurant’s existing assets to drive growth. Over the next four years, we tripled its revenue by streamlining processes, optimizing the menu, and investing in marketing strategies that resonated with the local clientele. This experience not only validated EtA as a powerful growth model but also reaffirmed my passion for identifying and scaling underutilized businesses.
You have taught Entrepreneurship for more than a decade at IE Business School, and I imagine this is where you first encountered the SF landscape. From your perspective, how does EtA compare with traditional startup models in terms of risk and rewards? What do you consider the most critical factor for a successful EtA strategy?
I was first introduced to the SF model almost simultaneously while teaching at FGV in Brazil and IE Business School in Spain. At FGV, I had just begun collaborating with the Private Equity and Venture Capital Research Center when a student approached me with questions about SFs. Around the same time, an IE alumnus told me about his involvement with one of Latin America’s early SFs. I was immediately captivated by the model and have been studying it ever since.
SFs present a unique risk-reward proposition. Unlike startups that often operate in unproven markets with unproven products, EtA focuses on acquiring stable businesses with established cash flows and market presence, mitigating early-stage risks. The rewards are tied to enhancing operational efficiencies and strategic growth, delivering significant returns when executed well. I find this process extremely challenging and extremely fun!
The rewards can be significant, driven by operational improvements and strategic growth initiatives. However, the real challenge lies in outstanding execution. The most critical factors for a successful EtA are identifying both the right searcher and the right business. Beyond solid fundamentals and a scalable business model, the cultural and value alignment between the searcher and the acquired company is key to long-term success.
Since 2016 you have transitioned into investing, supporting various SFs across multiple countries and participating in numerous acquisitions. What insights have you gained from this experience and what do you prioritize when evaluating a business?
Every engagement with a SF has offered a unique learning experience. One major insight I’ve gained is the necessity of flexibility in decision-making and supporting searchers in making tough calls rapidly. While financial models provide a framework, reality often diverges due to local market dynamics, cultural factors, and unforeseen external challenges.
When evaluating a searcher, I prioritize integrity and entrepreneurial leadership. When evaluating businesses, I prioritize positive cash flows and scalable growth potential. Financial health is non-negotiable, as it underpins a company’s sustainability. I also study the leadership team’s quality and their alignment with the searcher’s values, as successful transitions often hinge on their cooperation. Scalability through market expansion, new processes, new technologies and a potential for positive societal impact are other key factors.
Following these successful experiences you decided to launch Newton Equity Partners. What is the size of the fund you are targeting and why did you choose to establish it in Spain? What differentiates you from other search fund investors?
Newton Equity Partners is targeting an initial fund size of €30M, reflecting the niche nature of the SF ecosystem. We chose Madrid for its strategic location between two of the fastest-growing markets for SFs —Europe and Latin America— and its regulatory environment, which is favorable for risk capital initiatives.
What sets us apart is our passion for growing SMEs, our global perspective, and our focus on technology and ESG adoption. We offer more than capital — we partner with entrepreneurs to implement new technologies, ESG practices, and strategic innovation. Our global perspective, combined with a deep understanding of SMEs, enables us to foster long-term relationships and create meaningful, sustainable value.
What is the fund’s strategy in terms of portfolio development and what are your investment criteria? When will it be fully operational?
Our strategy focuses on building a diversified portfolio of businesses with resilient cash flows and growth potential. Our investment criteria target businesses with EBITDA below €7.5M, strong existing leadership teams, and opportunities for operational improvements and positive societal or environmental impact.
Newton Equity Partners is already fully operational. We have already incorporated the fund with a target size of €30M, pending to be registered in the CNMV, to invest in SFs, with plans to acquire the first business within the next six to eight months. Our medium-term goal with our first fund is to invest in about 100 SFs and build a portfolio of 20 to 25 companies, balancing stability with strategic growth.
As a private investor, you have backed searchers globally. What trends do you see emerging in the SF landscape, particularly in the context of emerging economies where you have substantial experience?
The SF model is gaining traction beyond its traditional strongholds, with new attractive markets. One notable trend is the increasing interest from local investors who, every day, see more potential in this asset class. Additionally, there is a shift toward more experienced searchers, with searchers targeting businesses with EBITDA above €5M, reflecting the realities of different markets with less Private Equity activity.
There is also growing interest in social and environmental impact. Investors are seeking not only financial returns but also businesses that contribute to sustainable economic development and job creation. The SF model continues to evolve, with diverse approaches to fundraising – with more CEO investors, deal sourcing – with more middle agents acting as brokers, and operational strategies – with more inorganic growth via M&A. The future of the SF landscape looks dynamic, with many opportunities for those willing to join the industry.
