Private equity as a courtship, with Javier Rosales
Javier Rosales, President of Alvic, explains why before talking about funds you need a family plan first — and why knowing your partner will leave, and for money, is the starting point, not the problem.
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When does it stop making sense for a family business to remain purely family-owned? That is the question at the heart of this episode of Do Better Podcast, in which Carlos Losada, Professor in the Department of General Management and Strategy at Esade, talks with Javier Rosales, President of Alvic and one of the most experienced entrepreneurs in the coexistence of family business and private equity in Spain.
The first thing they did at Alvic — a company founded in 1965, with 1,200 employees and a presence in 130 countries — was not call an investment bank. It was to sit down as a family and ask themselves what they actually wanted a fund for. Instead of the usual business plan and shareholders' agreement, they built what Rosales calls a family plan: the company at the service of the family, not the other way around. That prior clarity, he says, is what determines whether the relationship with private equity works or turns into a conflict with no way out.
The metaphor he uses to describe that relationship is blunt: it's a courtship with a known expiry date. It's not your wife, says Rosales; it's a partner you know is going to leave — and who is going to leave for money. Understanding that from day one changes how you negotiate the entry, how you manage the board and how you plan the exit. It also changes the kind of conversation you have with the fund managers, who don't decide alone but report to committees elsewhere in the world. Knowing how to read that position — and being clear about it with them — is, according to Rosales, part of what makes it work.
The deeper question the episode leaves is more complex: in Spain there are around 50 billion euros available to invest in approximately 2,500 portfolio companies, 90% of them SMEs. How much of that capital is generating real value beyond the fund's returns? What happens to the culture, the people, the legacy when financial logic takes over without nuance? Rosales doesn't offer formulas, but he does offer a warning: professionalising is not about building a management team geared towards the sale. That doesn't improve the company — it hollows it out.