LONDON, Feb 12 (Reuters) - Blackstone has appointed Inaki Echave as managing director for Spain and Portugal, as the world's largest private equity firm seeks investment opportunities in their ailing economies.
The euro zone's debt crisis has knocked company values in the Iberia region and frozen local lending for private equity deals.
But while the gloomy outlook is putting many dealmakers off, others see the potential to pick up bargains with little competition.
In October, Henry Kravis, co-founder of U.S. private equity firm KKR, said he saw a "real opportunity" to invest in Spain's real estate and financial services following the debt crisis.
Echave, most recently a partner with Magnum Capital - the largest independent buyout fund on the Iberian Peninsula - will work alongside Blackstone's chairman for the region, Claudio Boada.
Blackstone's only private equity investment in the region is its 2010 purchase of Spanish packaging company Mivisa, bought alongside local buyout firm N+1 for 900 million euros ($1.20 billion).
"Blackstone sees great opportunity in Spain," Joe Baratta, global head of private equity, said in a statement on Tuesday.
"We have faith that Spain's leaders are taking actions to put the economy on sounder footing, and we believe in the long-term potential of that economy."
Buyout firms are also attracted to Spanish and Portuguese companies that can give them a springboard into fast-growing Latin America.
Bain Capital made its first foray into the Spanish market in October with a deal worth 1 billion euros ($1.3 billion) for call centre operator Atento, which has a strong presence in Latin America.
Blackstone has $51 billion in private equity assets under management globally as of the end of 2012, with $16 billion to invest. Last year it invested $5 billion in private equity.