“Investing in private equity is like investing in people, in a team, in a value” – Cristina Badenes (MBA’98)

Cristina Badenes (MBA’98) is Partner for Institutional Relations and Corporate Development at Meridia Capital.

Question: Can you tell us about yourself and what you do?

Answer: I am a partner for Institutional Relations and Corporate Development at Meridia Capital, a Barcelona-based private equity fund management firm. I joined Meridia Capital almost 10 years ago. One of my main roles is to develop the firm’s business and institutional contacts, creating and maintaining key senior-level relationships within the sector worldwide. I am involved in the fund management group’s strategy while I promote Meridia Capital’s franchise globally. I also head the Research Department and closely follow the industry and markets.

Prior to Meridia Capital, I was an executive director in the Equity Research Department of UBS Investment Bank in London (ranked second-best analyst in the sector in Europe by the Thomson Extel Pan-European Survey and selected as one of the UK’s top ten stock-pickers). Prior to that, I worked in London as a vice-president in the Equity Research Department of Dresdner Kleinwort. I began my career in the Mergers and Acquisitions Department of JP Morgan and Salomon Brothers in London.

I graduated with honors in Economics and Business Administration and — most importantly! — I am an MBA graduate from IESE Business School (1996-1998).

My job over 20 years of experience in the financial industry has evolved tremendously. The first half of my career was more analytical and focused on my technical skills, while the second half has helped me develop my commercial and relationship management capabilities. I see it as a nice fit as I believe I have had the chance to grow in two very different areas that complement each other well – it is difficult to go with one without the other.

My tasks specifically within Meridia Capital have also evolved. This is mainly due to the “institutionalization” process the firm is going through. We are in the process of becoming regulated and also now have a different type of investor, moving from domestic family offices to international institutional investors. Although our commitment and drive is exactly the same to all our clients regardless of their nature, this shift implies a higher level of intensity in terms of visits and reporting requirements. The investor relations role gains strength. I am also responsible for the firm’s corporate development, including the design of a road map. I’m involved in the fund management group’s strategy to assure that it aligns with best practices and abides by the rules of corporate social responsibility.

Q: How many funds are you currently managing?

A: Our first fund, Meridia Fund I, was launched in 2007 with committed equity of €150 million. It aimed to build a portfolio of premium hotel properties internationally, especially in Latin America and Europe. We partnered with the world’s leading international hotel brands, and our assets included renowned upmarket hotels in key international locations. Having exited most of this portfolio throughout 2013 and 2014, the Fund was successfully liquidated.

We currently manage two funds: Meridia Fund II and Meridia Impact Fund. The former was launched in May 2014 and endowed with €150 million of equity (investment capability of circa €400 million). It focuses on the Spanish real estate sector. The market has picked up quite strongly over the last couple of years and, thanks to our very strong real estate team, we have managed to invest over three quarters of the Fund by now. We are currently exploring the possibility of a third real estate fund.

As far as Meridia Impact Fund (MIF) is concerned: this is a €12 million (target) fund launched in October 2014 which focuses on social projects. Our mission is to provide financial and non-financial support to social, sustainable, scalable, innovative and entrepreneurial organizations in Spain. This Fund aims to help create employment in the country and have a positive effect in the Spanish labor market, with a special focus on the young. Through this initiative, we would like to believe that Meridia Capital is becoming a pioneer in the area of impact investment in Spain.

Building Q - IESE MBA

Q: What is the difference between Private Equity and Real Estate investment?

A: When investing in real estate, we buy properties — something “tangible”. Any deal by definition entails risks, but we acquire something “physical”. However, investing in private equity is tantamount to investing in people, in a team, in a value, which is more complex to manage.

It is worth noticing that our first fund, Meridia Fund I, did not target just buildings. We acquired hospitality businesses. The P&L of the business was ours and therefore we were the ones assuming the risk. We paid a fee to the different hotel operators who managed the business on a day-to-day basis, but we were the ones ultimately assuming the risk. Our job was to manage the manager.

Meridia Fund II, which is a Spanish real estate fund with a value-added strategy, acquires different asset types (such as offices or shopping centers) with the aim of increasing its value, not only through playing the cycle, but most especially through an active ownership approach, where the role of the asset manager is crucial. Through a disciplined investment and asset management strategy, Meridia Capital emphasizes on value creation, not just buying low and selling high.

Q: How do you go about finding new investors?

A: Up until now, Meridia Capital has relied almost entirely on its strong networking capabilities. Throughout the years, we have been forging a solid contact base upon which we can now leverage. Our investors are our first priority and the core of our business. Providing them with the service that they deserve is of utmost importance in order to establish strong and long-lasting relationships. It is for this same reason that we try to make a conscious effort to ensure a transparent and bidirectional relationship between them and the firm. We are always available to them, open to listening their suggestions and ready to cover their needs. Their re-investments are highly appreciated and are extremely valuable to us. At the same time, they reinforce our reputation and help us attract new investors.

Another way of finding new investors is through a placement agent. Placement agents act as intermediaries between fund managers and investors, introducing them and helping private equity managers with their fundraising. Thanks to our worldwide network, we have not used the services of a placement agent before but you can never say never – we should not rule it out going forward as the firm grows.

Q: What profile does a private equity firm seek when hiring?

A: In our recruitment processes, we implement strict procedures that share our ethical standards and values. Regarding candidates, we look for top talent, people who stand out in the crowd and with a record of achievements in their different areas. We give special importance to a proactive spirit and an entrepreneurial drive, which are essential in our daily work. We try to shape the team according to these qualities.

Personally, and biased by my career in an extremely demanding investment banking industry, I consider dedication and perfectionism as key ingredients in a private equity professional. Both content/format and technical/commercial skills need to be flawless — and it is this constant pursuance of excellence that will brand a person for life.

Another relevant factor in private equity is personality. As I mentioned previously, relationships in this industry are crucial and we need to not just maintain them alive but also make sure that we create new ones as we grow. To develop that network, you need time and a specific set of skills that are inherent to one’s personal abilities as well as other capabilities that only experience and a long learning process can bring.

“We look for top talent, people who stand out in the crowd and have a record of achievements in their different areas”

Q: How did IESE help you get where you are now?

A: I was working at JP Morgan in London when I prepared my application to study an MBA at IESE. I was repeatedly advised against it by different people. I was told that people study an MBA to reach a position that I already held. However, I was determined and resigned as my application was accepted. A career is a long process that generally lasts a few decades. Two years dedicated to studying at IESE have, in hindsight, added more to my professional career and personal growth than another two extra years of work, and so I can now say, with perspective, that it was a very good decision that I have never regretted taking and that it marked my life in a very positive way.

One of the things that I remember the most at IESE, after having gone through hundreds of business case studies, is to learn how to detect a problem. Funnily enough, I only realized that after having finished my MBA. With the problem rightly detected, you are more than half way there. I was also taught to try and find different ways to approach one same issue and solve it. IESE ensured that we worked in mixed groups – with students from different countries and cultures and with different academic and professional backgrounds, which opens your mind. I can see that reflected in the way that I approach new challenges. Studying at IESE was also very useful in terms of learning how to think critically and improve my communication skills – factors that have been very important in my professional career.

Q: Your favorite class and professor?

A: I vividly remember Professor Segarra’s high energy and contagious enthusiasm. The class that I enjoyed the most, having previously worked in investment banking, was Corporate Finance with Professor Pablo Fernández. And Professor Fernando Pereira was charming – a great human being with an amazing sense of humor. Inspiring and an example to follow.

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