Sovereign funds invested 6.9 billion euros in Spain in 2023, the second best year since Mubadala (one of Abu Dhabi’s investment arms) bought Cepsa in 2011. Sun and sand, renewable energy , telecommunications (due to the entry of Saudi Arabia into Telefónica) and padel are the main attractions of our country for these public funds, which have increased the volume of assets they control by 13% throughout the world, to exceed 13,000 billion dollars in total, or eight times our country’s GDP.
Funds from the Middle East, Norway and Singapore completed 13 transactions last year, highlighting acquisitions in the hospitality sector (mainly in Meliá) and in projects linked to the energy transition (notably in Iberdrola).
Iberdrola
“Iberdrola has been extraordinarily active in establishing strategic alliances with sovereign wealth funds,” highlights the report on sovereign wealth funds prepared by IE University in collaboration with ICEX-Invest in Spain, published this Tuesday. Iberdrola’s relationship with these state investors dates back to 2011, when Qatar Investment Authority (QIA) acquired 6% of the Spanish power company for 2 billion euros (QIA still controls 8.71% of its voting rights and remains its main shareholder).
In 2023, Iberdrola carried out four relevant operations with three different sovereign funds. In January 2024, the Norwegian sovereign wealth fund invested €307 million in the company to acquire a 49% stake in a portfolio of renewable assets in Spain and Portugal. “This investment is part of a wider partnership that we discussed last year, with the aim of investing more than €2 billion over the next three years,” the report explains. “It includes onshore wind and solar photovoltaic projects totaling more than 1,300 MW, capable of providing energy to more than 700,000 homes per year and avoiding more than 350,000 tonnes of CO2 emissions each year,” he continues.
Going back to the past, the second agreement was signed within the framework of the COP28 global climate summit in Dubai, in December 2023. Iberdrola reached an agreement with Masdar (owned by Mubadala, ADNOC and Taqa, an energy company controlled by subsidiary of ADQ, another sovereign wealth fund of Abu Dhabi) to “co-invest an impressive amount of 15 billion euros in offshore wind energy and green hydrogen in Germany, United Kingdom and the United States,” the report said. report from IE University and ICEX.
This co-investment agreement was preceded by the regulatory approval, in November 2023, of a €1.6 billion alliance with Masdar to co-invest in the “Baltic Eagle” offshore wind farm, the second largest large offshore wind project in Germany. Iberdrola will retain a majority stake in the project while Masdar will retain 49% valued at €784 million.
In April 2023, through its Brazilian subsidiary Neoenergia, Iberdrola signed a strategic agreement with GIC (the sovereign wealth fund of Singapore) for the development of transport networks in Brazil for $476 million. The two companies will jointly invest in operating assets, i.e. 1,865 kilometers of transmission lines with an average concession duration of 25 years. The alliance gives priority to GIC and the right to acquire a 50% interest in other assets under construction and operation spanning an additional 6,279 kilometers. GIC will hold a 50% stake in the company, valued at €215 million.
Phone
For its part, in September 2023 (a fairly active month in sovereign funds in 2023), Saudi Telecom Company (STC), partly owned (64%) by the Saudi Public Investment Fund, acquired a stake of 9.9 % in Telefónica. 2.1 billion euros, thus becoming the shareholder with the greatest voting rights at the time. “In fact, STC’s investment was divided into two parts: first, by the acquisition of shares representing 4.9% of the share capital of Telefónica, and secondly by the acquisition of financial instruments that confer exposure economic to an additional 5% of the share capital”, details the report.
This second tranche is awaiting regulatory approval. Since then, Criteria Caixa has increased its exposure to 10.01% and SEPI (Société Nationale de Participation Industrielle) reached 10% in May 2024.
Tourism
“The real estate sector attracted some of the largest operations carried out by sovereign funds in Spain between January 2023 and March 2024. Supported by the rebound of the global tourism industry, sovereign funds continued to support one of the main elements of the Spanish economy. economy,” indicates the report published this Wednesday.
“Spain has consolidated post-pandemic trends with almost 85 million international arrivals in 2023 alone, becoming the second most visited country in the world. Reflecting this dynamism, hotel investment in Spain reached 4.25 billion euros in 2023, the second highest volume in the country’s history, surpassed only by the 4.8 billion euros recorded in 2018 In 2023, 171 hotels were sold (an increase of 29% per year). -over one year) and 21,748 rooms (22%), up significantly compared to 2022,” breaks down the document.
Large portfolio transactions were the main protagonists, with a volume of 2.6 billion euros. “And within that category, sovereign wealth funds are, in fact, sovereign. GIC from Singapore and ADIA from Abu Dhabi are at the head of the group and confirm the internationalization of the Spanish hotel market, gaining in global attractiveness. In September 2023, ADIA acquired 17 properties belonging to Equity Inmuebles (hotel real estate company of the founding families of Tryp) for an amount close to 600 million euros,” the report said.
In the first quarter of that year, Equity Inmuebles put the 17 assets, or some 2,500 beds, up for sale. Five of them operate under the Meliá brand, three under the Sol brand, eight under the Tryp brand and the iconic ME Madrid Reina Victoria. The operation now authorized by the competition will allow Meliá to continue to operate under the management of the 17 establishments in the Equity Inmuebles portfolio that it has rented since 2002. In addition, ADIA has acquired 51% of a second portfolio (Avenue Capital) partially controlled by subsidiaries linked to Meliá in Majorca (Magaluf). The transaction is valued at 250 million euros.
Thanks to these successful transactions, ADIA and Meliá plan to create a joint company to manage these 24 hotels, hoping to reach a valuation of 1 billion euros. This strategy would include the renovation and repositioning of certain assets, thus helping to modernize the hotel offer in Spain.
For its part, GIC participated in one of the significant movements in the European hotel market in October 2023. The Singaporean sovereign fund acquired a 35% stake in Hotel Investment Partners (HIP), Blackstone’s hotel platform for the south of Europe. Originally founded by Alejandro Hernández-Puértolas and Banco Sabadell in 2015, Blackstone acquired HIP in 2017. Since then, Blackstone has invested more than €600 million in the platform, which now has a portfolio of 72 hotels in Spain, Greece, Italy and Portugal. , with more than 21,000 rooms, operated under global brands such as Ritz-Carlton, Barceló, Meliá, Hyatt, Hilton, Ledra or Marriott. Blackstone will retain a majority stake of 65%.
Sport
In August 2023, Qatar Sports Investments (QSI), a wholly-owned subsidiary of Qatar Investment Authority and one of the world’s leading sports investment companies, and Damm, the Barcelona-based brewery whose sports subsidiary Setpoint Events organizes The World Padel Tour (WPT) since 2013, has reached an agreement for the acquisition of WPT by QSI.
Led by Nasser Al-Khelaifi, president of Paris Saint-Germain football club and CEO of beIN Media Group, QSI reportedly valued the transaction at at least €30 million, although the financial terms of the deal were not confirmed. not been revealed. QSI launched a rival parallel competition to the WPT known as Premier Padel in 2022. From February 2024, the WPT ceased operations and Premier Padel took over. “The transaction demonstrates the impressive growth and capillarity of a sport that has secured multi-year broadcast deals spanning more than 180 countries and reaching more than 150 million households. The inaugural season of Premier Padel 2022 attracted 23 million views on YouTube,” notes the report on sovereign funds.
Other operations in 2024
In February 2024, the Norwegian fund acquired a 2.6% stake in Wallbox, a Spanish “unicorn” that makes chargers for electric vehicles and which began trading on the New York Stock Exchange in October 2021. “L The Barcelona-based company has lost 93% of its market value since its peak in early 2022, the report said.
During the year 2024, the investment arm of the Nordic country has made several strategic adjustments of its Spanish investments, increasing its net participation by 5% in the banking sector (notably in Unicaja, BBVA and CaixaBank) and by 49 % in the energy sector (notably in Iberdrola and Repsol). The five largest positions of the Nordic investment giant are, as of June 2024, Iberdrola (2.6 billion euros), Inditex (1.5 billion euros), BBVA (1.4 billion euros) , Santander (1.2 billion euros) and Repsol (837 million euros). . The Norwegian fund holds its largest positions (in terms of voting shares) in Unicaja (7.7%, an extraordinarily high exposure by NBIM standards), Repsol (4.36%), Solaria (4.3%). %), Cellnex (3.24%) and Iberdrola (3.15%).
