YIELCO targets EUR 290m PE value lower mid-market co-investment fund
(Mergermarket: Adrian Espallargas — 19 enero 2026)
YIELCO Investments is targeting a EUR 290m hard cap for its second value-focused lower mid-market private equity (PE) co-investment fund, Spain Country Head Julián Álvarez told Mergermarket.
Investors can currently only access YIELCO Defensive Investments II through its Spanish vehicle, Álvarez said. It is expected to reach a final close in 1Q26 and aims to raise up to EUR 40m, he said, adding that it has secured around EUR 25m so far. Álvarez is a member of the firm’s investment committee.
The fund comprises two vehicles — a Spanish vehicle that remains open and a Luxembourg-based vehicle that closed in mid-2025 after raising EUR 250m, reaching its own hard cap, Álvarez explained.
The EUR 290m total hard cap refers to the combined size of both vehicles, assuming the Spanish vehicle reaches its EUR 40m target, Álvarez said.
Investors in the Luxembourg vehicle are around 95% institutional, including insurance companies and pension funds, among others, Álvarez said. By contrast, the Spanish vehicle includes some institutional investors but is primarily backed by large family offices, typically writing tickets of EUR 2m to EUR 3m, he said.
The strategy targets equity commitments around EUR 15m per transaction, in line with the lower mid-market focus, Álvarez said. As a result, the firm opted to keep the overall fund hard cap at EUR 290m, aligning its size with its target investment profile, despite strong investor demand that could have supported a larger fund, he added.
The fund has a ten-year life and is targeting annual returns of more than 15%, he said.
The fund’s “Defensive” name reflects its focus on low entry multiples and conservative leverage to help mitigate downside risk in the event of a recession, Álvarez siad.
At least 75% of investments must be priced at below 8x EBITDA, the executive said. The investment focus is split roughly 50–50 between Europe and the US, he added.
The vehicle pursues a sector-agnostic strategy, though it typically invests most frequently in consumer, industrial and B2B businesses, he said.
The fund co-invests alongside sponsors to take majority stakes and injects primary capital into portfolio companies to fund growth, with both organic and inorganic initiatives considered on a case-by-case basis, Álvarez said. The strategy also includes carve-outs of business units from larger groups and family-owned businesses seeking an exit as part of succession planing, he said.
The sponsors are PE firms with which YIELCO has long-standing relationships across both the US and Europe, he said.
Approaches freom potential sponsor partners, as well as investment opportunities from prospective acquisition targets, are welcome, he said.
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Sobre YIELCO INVESTMENTS
YIELCO Investments es un especialista independiente en inversiones en mercados privados que opera a nivel mundial con sede en Alemania, Suiza, España y Luxemburgo. El grupo gestiona más de 11 000 millones de euros en compromisos de capital de inversores institucionales en private equity, deuda privada e infraestructura.
Contacto de prensa
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