Special Update - Alantra
The recovery has been postponed
Alantra is a Spanish financial services provider with presence in 19 countries, among which the United Kingdom and Spain stand out. The company has four segments: Investment Banking, Credit Portfolio Advisory, Asset Management, and Minorities (investments in other companies/funds), with the former being the key driver of profitability in a normalized environment.
As we mentioned in our initial analysis three months ago, the company is at the bottom part of the cycle since the overall M&A market has been under severe pressure over the past couple of years due to the rising interest rate environment, and returns from Europe (where it has the majority of exposure in its Asset Management segment) have not been good enough to achieve the huge success fees it aims for. Dealmaking activity across the globe has been very slow, and furthermore, Alantra is specifically focused on the mid-market, which remains in the doldrums.
Alantra has practically half of its market capitalization in net cash (and equivalents) and could be a very interesting player for the market recovery, since it is a renowned player in the industry. However, in the short term, Trump’s tariffs (and the instability they generate in companies) have caused the slowdown in activity to continue, and the company must keep struggling to find the balance between reducing headcount and not going too far in cutting its most valuable capital for when the market recovers.
Today we take a detailed look at Alantra’s situation after publishing its 2024 results, and what expectations we can have for 2025
