Spanish Stock Exchanges and Markets (BME) has identified a new market niche in small start-up companies with high growth potential and seeking financing. For this reason, the manager of the Spanish Stock Market wants a new benchmark called ‘BME Scale’which will house precisely this type of firm that in the jargon of private capital is known as scale-upswhich is the next step to being a startup, for the most initial stages.
The universe of companies that make up this market would be made up of “companies that together have a turnover of around 6,000 million euros, with close to 850,000 employees, including direct and indirect positions, with an average presence in five countries and that need capital to grow”, explained Jesús González, managing director of BME Growth and BME Scale this Thursday during the presentation of the new project in Madrid.
The national manager has lowered the access requirements, simplifying them and reducing costs by a third of incorporation and maintenance in the market since a liquidity provider is not needed. This is one of the keys that differentiates the new BME Growth Stock Exchange, because González Nieto assumes that liquidity will be very low and that is why small investors are not sought. It is a market aimed at qualified professionals from the world of venture capital, business angel, family offices or private banking, which make products to this for its clients, such as Renta 4 or Andbank. These values are also targeted by alternative funds, lately very fashion in Spain taking into account that the Government has lowered the minimum investment required, from 100,000 to 10,000 euros, although very few houses or managers offer these products to individuals due to the high risk they entail.
There is still no list of suitors, but BME is clear about who could aspire to be listed there. The manager speaks of a universe of some 500 companies that only last year raised close to 1,500 million euros in financing rounds with private capital. They will quote, who so decide, in format fixing once a day (at 12 in the morning), which consists in exchanging the purchase and sale orders for securities that have accumulated throughout the session at the predetermined time. It is typical of companies with little liquidity.
Specifically, González Nieto assures that the new BME Scale will receive high-growth technology companies, above the 20% required to be considered ‘scale-ups’, and also socimis. This is one eternal war that the national manager would have lost against EuroNext in recent years, where listing is cheaper and also easier in bureaucratic terms. Some twenty Spanish socimis have chosen the Amsterdam Stock Exchange to be listed, but now the picture could change. It should be remembered that socimis are real estate investment vehicles that have the obligation to be listed on the market, as well as to distribute a minimum of 80% of their net profit among investors. It is a form of deferred taxation, since it is the shareholder who pays the Treasury for the money received in dividends and the company does not, therefore, in the event that it distributes more than 100% of the taxable profit in Spain. Now, at present, almost 80 socimis are listed on BME Growth, although in some cases, with ridiculous liquidity and almost 100% controlled by a single investor, which casts doubt on the purpose for which they have gone public if It is not to avoid paying taxes.