The sovereign funds have accumulated close to 5.6 billion euros of investments in Spain practically since the beginning of the invasion of Ukraine and since energy prices experienced the biggest rise in decades. In 2022 they broke their record and this year they will foreseeably surpass it again, according to the Icex Sovereign Wealth Funds 2023 report, presented today in Madrid.
The report is presented just one day after the international meeting of sovereign funds in Madrid concluded and Telefónica's board of directors addressed for the first time the investment of Saudi Telecom, 64% owned by the Saudi State.
"Spain experienced record levels of sovereign fund activity in 2022 and the first part of 2023 amid economic, geopolitical and social uncertainties," the report states. The "high volumes of transactions" and "strategic alliances", he indicates, have been the trend when investing in the country.
Last year, sovereign funds carried out 11 transactions in Spain, a record number that exceeds the maximum in 2014. They moved 2.9 billion euros, a figure that had not been seen since Mubadala took over Cepsa in 2009.
At the beginning of this year, the Norwegian sovereign fund Norges Bank invested 600 million in a strategic alliance in renewables, to which is added the 2.1 billion euros used by the Saudi sovereign fund Public Investment Fund in the purchase of 9.9% of Telefónica . This last operation is not included in the report, which includes data until March.
The funds' increased activity, much of it backed by oil revenues, came in a year in which global direct investment fell 12% to $1.3 trillion. The invasion of Ukraine and the consequent geopolitical uncertainty reduced transactions between countries, but not those carried out by sovereign funds.
"Sovereign funds have continued to accumulate wealth in the world and their assets under management exceeded 11 trillion dollars for the first time, 11% more and twenty times the value of the Ibex," said one of the authors of the report during the presentation. , Javier Capapé, from IE University. "They have a lot of ability to create teams and are capable of doing a lot of operations."
There are already 70 sovereign funds in the world, but 73% of the investment corresponds to the first ten, linked for the most part to oil revenues or, as in the case of China, to export surpluses.
The Norwegian sovereign fund Norges Bank leads the ranking, ahead of the Chinese CIC and SAFE, and also the Emirati ADIA, the Kuwaiti KIA and the Saudi PIF. Those from the Middle East invested 15% more last year and the Chinese, 11% more.
In the case of Spain, the funds have already invested 46 billion euros in the country, with three large investors at the helm: the Norwegian Norges Bank, the Singaporean GIC and the Emirati Mubadala. Real estate and technology are the areas that now receive the greatest investments.
The Government, apart from the eventual imposition of conditions on Saudi Telecom in Telefónica, supports the investment of these firms. "One of the objectives of having sponsored the annual meeting of sovereign funds in Madrid was to put the focus on the country as an attractive destination for sovereign funds," said the Secretary of State for Commerce and president of Icex, Xiana Méndez, in the presentation. .
The Singapore fund GIC plans to invest 1.5 billion to build 8,000 rental homes in Spain together with Azora, while Mubadala continues to invest in nursing homes, investing 630 million in different assets. The Emirati fund is also betting heavily on biofuels.
The Omani fund Oman Investment Authority is also active by entering agri-food companies such as Llusar, Palacios or Symborg, legal tech companies such as Logalty and pharmaceutical companies such as Uriach.
