Sovereign funds have invested 6.9 billion euros in Spain, a figure that represents a record since 2011, and which has included a total of 13 operations focused on the hotel sector and energy, according to the conclusions of the Sovereign Funds Report 2024 carried out by the Center for the Governance of Change of IE University, with the collaboration of ICEX.
This is the second most significant year in attracting sovereign investment in the historical series, only surpassed by 2011 (when IPIC, now Mubadala, of Abi Dhabi, acquired Cepsa). The investments made last year represent 140% compared to the 2022 figures. The authors of the report also emphasize that if the period covered by the report (January 2023 to March 2024) is taken into account, the figure rises to 7.2 billion euros, with a significant concentration in infrastructure (both digital and, especially, renewable) and real estate (hotel sector).
In this sense, among these operations, the one carried out by the GIC fund, from Singapore, stands out in the acquisition of a third of the value of the hotel group HIP (Blackstone) for 1,400 million euros, and Melià, which has received an investment of 730 million of euros by the sovereign fund ADIA, of Abu Dhabi.
On the other hand, the renewable energy market remains on the rise around the world due to the need to look for alternatives to fossil fuels, accelerated in Europe by the war in Ukraine and the search for independence from Russian gas; although the most traditional energies continue to “coexist” with those from sustainable sources.
In Spain, several operations stood out, which together reached 1,700 million euros, carried out by Iberdrola with the funds Norges Bank (Norway) and Mubadala (Abu Dhabi).
The report also highlights the operation carried out by the Qatari fund, Qatar Investment Authority, through which it acquired the rights to the Padel World Tour (a sport with increasing growth in the world) from the company Damm for a value of 30 million.
The total volume of assets of sovereign funds worldwide has reached 13.6 trillion dollars, around 13 trillion euros, with a growth of 14% compared to the previous year, growing at a rate of 1.6 trillion of dollars (1.5 trillion euros) in the last 12 months, which is equivalent to the Spanish GDP.
Likewise, sovereign funds have grown both in volume of assets, in eleven years this amount has tripled, and in number of funds, exceeding 100 for the first time.
Leading the way, Norway
The Norwegian Government Pension Fund Global continues to be the largest sovereign fund, approaching the symbolic figure of two trillion euros and being the one that has grown the most during 2023.
China Investment Corporation (CIC) and State Administration of Foreign Exchange (SAFE) remain in second and third place for the second consecutive year: CIC has 1.2 trillion euros and SAFE, around 1 trillion euros.
The fourth, fifth and sixth positions are currently occupied by the Middle East funds, the Abu Dhabi Investment Authority (estimated at 946 billion euros), the Saudi Arabian Public Investment Fund (PIF), with 930 billion, and the Kuwait Investment Authority ( KIA), with an updated estimate of €924 billion of assets under management.
The concentration of fund assets remains high, such that the study concludes that 20% of these funds manage 80% of the assets, therefore, figures similar to the size of many developed countries are in the hands of of a few economic actors.
An aging world, larger sovereign wealth funds
The study highlights that both the United Kingdom and Ireland will be the next to have a new sovereign fund that serves as a lever to carry out their national strategies due to the difficulties that may arise in generating financial instruments for the industrial network.
In part, the cause of this change is due to the aging of the population in Europe, which will cause large imbalances in national accounts when much more will have to be paid for retirement than what is contributed to public coffers, according to the authors of the report. .
Likewise, both candidates in the US presidential race had commented on the possibility of creating a federal sovereign fund for the US; funds of this type already exist at the state level, but not throughout the country.
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