The appetite of Spain’s sovereign wealth funds is still far from weak. Purchases by these investment giants, intended to channel public savings to several countries – many of them oil and gas producers – closed last year at record levels: 11 transactions (equivalent to the peak in 2014) worth $2.9 billion. (Just as in 2009, when Abu Dhabi landed CEPSA), according to data released on Thursday by the Institute of Foreign Trade (ICEX, public) and the Institute of Business (IE, private business school). The “strong” growth pattern also continued in the first four months of 2023, according to statistics.
Although Spain’s numbers are large, it is still far from the main investment destinations for sovereign funds at the global level. The United States was again the country attracting the most money from these investment vehicles: $55 billion (€52 billion) in 2022, 58% of the global total. The United Kingdom came in second place with 13.5%, followed by India (8.2%), Saudi Arabia (2.9%), and Germany (2.7%). In absolute terms, the investment figure in these four countries was around $43 billion, with the real estate, healthcare, financial and IT sectors – respectively – being the main destinations.
In Spain, bricks led capital inflows from sovereign funds last year. This is largely due to the €1.5 billion transaction announced by Singaporean company GIC in a future portfolio of 8,000 rental homes with Azora which constitutes “the most significant investment by a foreign investor in this type of asset in the country”, he said. The report’s authors include Javier Capabi and Rodrigo Arce, both IE University professors and SWF specialists.
Mubadala, the sovereign fund of Abu Dhabi and the majority shareholder in the oil company Cepsa, has also joined this drive to buy Spanish real estate, which in 2021 had already acquired a nearly 50% stake in Healthcare Activos and which has returned to pumping money in recent months to accelerate its growth plans worth $1 million: $1.5 billion over the next four years. This summer, Mubadala announced the purchase of 17 hotels in Spain for 600 million euros.
Beyond real estate, ICEX and IE technicians highlighted GIC’s participation in the latest round of funding by Spanish HR firm Factorial, which has just received a unicorn tag for surpassing its $1 billion valuation. Founded in 2016, it has been growing at a triple-digit rate for several years.
Summit in Madrid
The presentation of the report comes a few days after the main global association of sovereign wealth funds held its annual summit in Madrid, which brought together investment vehicles with assets exceeding five trillion euros in the Spanish capital. “One of the aims of sponsoring this meeting was to focus on Spain, a country they know well and which offers them very great opportunities,” Secretary of State for Trade Ziana Mendes admitted on Thursday. “The majority of the world’s major sovereign funds are located in Spain and constitute a phenomenon of particular interest because of their ability to capitalize Spanish companies. An open economy like the Spanish economy cannot be imagined without all these international investments,” he added.
The study also comes to light amidst the dust due to the entry of the first telecommunications company in Saudi Arabia (public ownership) into the capital of Telefonica. Although this investment is not led by that country’s sovereign fund, it is another example of the strength of petrodollars in Europe in general and in Spain in particular.
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