The Diplomat
Spain is among the top ten recipients of investment from sovereign wealth funds in the world despite the sharp decline in Foreign Direct Investment (FDI) in 2020 due to the pandemic.
According to the latest Sovereign Wealth Funds 2020 Report, prepared by IE University’s Center for the Governance of Change in collaboration with ICEX-Invest in Spain, Spain received investments from nine different sovereign wealth funds, worth close to 1.3 billion euros, for a total of twelve operations between January 2019 and September 2020, which places our country “in the top 10 of countries receiving investment”, with 3% of the operations registered worldwide in the aforementioned period.
The report was presented yesterday at an online event, opened by the Secretary of State for Trade, Xiana Méndez, and the Dean of the IE School of Global and Public Affairs, Susana Malcorra, and in which the Director of Sovereign Wealth Research at the IE Center for the Governance of Change, Javier Capapé, detailed the main keys of the publication, which analyses 165 operations around the world worth 43,000 million dollars. The United States, United Arab Emirates, China, India and Mexico were the destinations of most sovereign investment in 2020.
Sovereign wealth funds invested in Spain and Spanish companies in several sectors, such as real estate, where the acquisition of a luxury hotel by GIC, the active Singapore fund, stands out. In addition, the report highlights the entry of sovereign wealth funds into the capital of industrial and manufacturing companies in capital goods for the automotive and renewable wind power industries and the “continued interest in the food and infrastructure sectors”.
At least nine different sovereign wealth funds invested in Spain in this period. According to the study, the interest of major funds, such as the aforementioned GIC of Singapore and those of Qatar and the United Arab Emirates (Mubadala), continues. In addition, this year Sopef (the sovereign co-investment fund established by COFIDES and the Oman Investment Authority) stands out, which has made its first five investments and is expected to make between four and six more operations in the coming months.
“Sovereign wealth funds are a leading investor in Spain, not only because of their volume, but also because their presence is stable over the long term and is highly aligned with Spain’s objectives of productive transformation towards a digital and more sustainable economy”, said Xiana Méndez during her speech, in which she pointed out that more than 15 sovereign wealth funds currently have investments in Spain worth 42 billion euros, in the form of direct investment, portfolio investment and debt purchases.
“Furthermore, this report reflects how COVID-19 has affected the activity of sovereign wealth funds around the world” and shows that, despite this, “Spain maintains its capacity to attract investment and is among the top ten recipients of investment from sovereign wealth funds”, added the Secretary of State, who indicated that Foreign Direct Investment (FDI) in Spain fell by 13% year-on-year in the first three quarters of 2020 due to the pandemic, although there are “hopeful figures” for the last quarter.
