Portfolio turnover of Venture Capital & Private Equity firms is slowing. Following the recovery of divestment momentum in 2021, and after the global pandemic was overcome, the geopolitical conflict that broke out at the beginning of 2022 and its subsequent effects on prices and monetary policy are affecting the outlook and valuation of assets, and thus making sales transaction decisions more difficult, which has led to a greater focus on active portfolio management and a lengthening of the expected timeframes for exits from companies. This trend was particularly strong in the third quarter of 2022, following a positive start to the year in which large sales were closed, such as Cupa Group, Esmalglass and Neolith. At the end of the year, divestment activity recovered slightly, with notable Private Equity and Venture Capital transactions, including, respectively, Garnica, Ekon and Aire Networks in PE, and Inbenta and Pridatec in VC. In 2022, the sales of investee companies (at price cost)1 across all Venture Capital and Private Equity firms totaled €1,952M, representing a 26.8% decrease from the volume recorded in 2021, albeit still hig´her than in 2020. In total, 439 divestments were recorded, 78 more than in 2021 (361). 84% of divestment volumes arose from Private Equity transactions (€1,639M). In contrast, 76% of divestments were made in Venture Capital transactions. By type of entity, divestment was led by international GPs with €1,211.1M in 2022, 32.8% lower than the previous year, across 39 divestments (1 more than the year before). Private domestic GPs completed divestments totaling €598.2M (-27% from 2021) in 216 divestments (+26%). Finally, public domestic GPs increased their divestments by both volume, totaling €143M (223% annual growth), and number of investments, with 152 in 2022 compared to 152 in the previous year. The sector with the highest divestment levels in 2022 was IT (150 exits, representing 34.3% of total), followed by Industrial Products and Services (49; 11.2%) and Consumer Goods (40; 9.1%). By volume divested, the following sectors stood out: Consumer Goods (€312.2M, representing 16% of total volume), followed by IT (€253.1M; 13%), Healthcare (€231.3M; 11.8%), Industrial Products and Services (€209.4M; 10.7%) and Chemicals/Plastics/Materials (€185.7M; 9.5%). The average holding period for the portfolio was 6.8 years (in terms of total divestments), compared to 6.3 years in 2021, the highest average figure since 2017 (7 years). This increase was influenced by the 61 divestments through loan repayments that had been held in the portfolio for 7 or more years in 2022, compared to the 11 recorded the previous year. Some of the main divestments in the Private Equity sector in 2022 were headed by, inter alia, The Carlyle Group in Cupa; LoneStar in Esmalglass; Investindustrial in Neolith and Natra; IGC in Grupo Garnica; Oakley Capital in Ekon; EQT Partners in Adamo; Bridgepoint in Miya Water; Magnum in Aire Networks, Grupo IMO and INDIBA or Diana’s Grand Solar. The following Venture Capital divestments stood out: Cathay, Entree, Seaya Ventures, 4Founders y Bonsai Ventures in Glovo2; Forbion, Ysios, Gilde, CDTI Innovación, Lunbeckfond, Baxter, Alta Life Science, Columbus, Healthequity and Edmon in Laboratoris Sanifit; Oakley and Adara in Seedtag; Inversur and Level Equity in Inbenta; Nauta and Elaia in Holded; Adara and Segtech (Prosegur) in Hdiv; Seaya in Rated Power; JME Ventures, Sabadell VC, Encomenda and Bankinter CR in Declarando; Conexo, Sabadell VC and Encomenda in Pridatec; Caixa CR, Unirisco and Uninvest in Nanogap; Telefónica Ventures in Satlantis Microsats; Kibo in Billin; K Fund in Frontity; or Cathay in Wallbox, among others. Divestment by type of Private Equity & Venture Capital entity (GP) Domestic public GP Domestic private GP International GP Source: SPAINCAP/webcapitalriesgo 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 6,000 5,000 4,000 3,000 2,000 1,000 0 € Millions Divestments Notes