While the CEO of Apple, Tim Cook, was interested in the creative businesses of Madrid this weekend, other visitors with their own light, the representatives of the most important sovereign funds in the world, arrived in the city for their annual meeting behind closed doors in one of the four towers of Paseo de la Castellana, that of the Eurostars hotel. If Cook represents a company valued at 2.7 trillion dollars, sovereign funds do the same with nearly 11 trillion under management, several times the GDP of Spain.
Despite the disparity of origins – the big ones owe their fortune to oil -, these funds have in common the need to “adapt investment strategies” to a new global environment, according to the report that has served as the basis for the meeting of the International Forum of Sovereign Wealth Funds (IFSWF). The moment, they indicate, is marked by inflation and interest in assets related to technology, the ecological transition and real estate.
The governor of the Bank of Spain, Pablo Hernández de Cos, and the acting vice-presidents of Economic Affairs, Nadia Calviño, and of Ecological Transition, Teresa Ribera, paraded through the meeting. In its meetings with investors, the Government emphasizes the attractiveness of Spain, which several sovereign funds have invested in in recent years.
Representatives from companies such as Iberdrola and Telefonica also took part in the meeting. The first has the Qatari sovereign fund Qatar Investment Authority (QIA) among its first investors, with 8.6%, and the Saudi Public Investment Fund (PIF) has just bought 9.9% of Telefónica. The central government is waiting for him to ask for permission to exercise his political rights.
The report of the meeting starts from the premise that, “after several years of increasing globalization, international trade and a benign credit environment, investors face an increasingly complex and uncertain environment”. “Multipolarity” is “evident” and the “digital dimension” is gaining relevance, he says.
Real estate assets are in the focus of the funds “despite the pressure of rising interest rates”. Its link to inflation offers “a degree of protection, and makes real estate investments attractive in the long term”. Last year, sovereign wealth funds tripled investment in this area, says the report, which also highlights the “solid foundations” of the bet on technology. Renewables and the ecological transition complete the main areas of interest.
The Madrid meeting was organized by the development financing company Cofides, which in the absence of a large local sovereign fund exercises some of its functions. These days – the meeting ends today with a visit to Toledo – more than 200 representatives of 45 funds and organizations have participated.
The president of IFSWF, Obaid Amrane, highlighted among other things the importance of the meeting to “help promote a greater understanding of the different roles of sovereign wealth funds at national and international levels”, according to statements sent by Cofides.
The colloquiums, in which access to the press has not been allowed, have included the first executives of sovereign funds such as the Chinese CIC, the Emirati Mubadala, the Brazilian BNDS, the Indonesian IIA, the Qatari QIA or the Singaporean GIC.
