Spain attracted 2.8 billion euros in transactions with 12 Spanish companies between October 2020 and December 2021. GIC (Singapore) and Mubadala (Abu Dhabi) were the most active in Spain by volume and transactions. The 98 sovereign wealth funds active in 2021, in 70 countries, carried out 450 transactions, 171% more than the previous year.

The USA is for yet another year the top destination for investing funds and India became the second largest market with most transactions, ahead of China and the United Kingdom.

Sovereign wealth funds increased the rate of direct investment in 2021 with 450 transactions being closed, recording growth of 171%  according to the latest Sovereign Wealth Funds Report 2021, prepared jointly by the Centre for the Governance of Change at IE University and ICEX-Invest in Spain.

The presentation of the report, which took place at the ICEX headquarters, was chaired by the Secretary of State for Trade, Xiana Méndez, and Manuel Muñiz, dean of IE University's School of Global and Public Affairs. Alberto Sanz, Director of Financing and Investor Relations at ICEX-Invest in Spain, also moderated a panel of experts, and Javier Capapé, director of Sovereign Wealth Research at the IE Centre for the Governance of Change, described the key points of the publication, which analyses the trends in these large international investors in 2021.

According to those responsible for the study, the most active sovereign wealth investors last year were two funds in Singapore: Temasek and GIC. The Emirati state-owned holding company Mubadala, with 80 transactions in the period analysed, also figures in the top ranking positions. The Russian Direct Investment Fund and India's National Infrastructure and Investment Fund of India also stand out as being highly active, although their focus is more domestic. The USA, for another year running, continues to be the top investment destination. According to the report, the new development was India rising to second place, by number of transactions, ahead of China and the United Kingdom.

Spain attracted 2.8 billion euros with investment in 12 companies
The sovereign wealth funds increased their commitment to Spain and its companies. From October 2020 to December 2021 sovereign wealth funds invested more than 2.8 billion euros in 12 Spanish companies. This is a record level of investment, only surpassed in 2011 and 2009 in the historic transaction when Mubadala took control of Cepsa. The growth in the amount of sovereign wealth funds doubles the figures in the previous report with the same number of transactions. This boost to sovereign wealth investment in 2021 has two names: GIC, one of the two Singapore sovereign wealth funds, and a prominent country, Abu Dhabi.

For the Secretary of State for Trade, these data "highlight the activity of sovereign wealth funds in Spain and allow us to anticipate global trends to reinforce Spain's attractiveness to the international investment community."

Xiana Méndez thus highlighted the good foreign direct investment position and the attractiveness of Spain for foreign investment. “Our foreign trade is becoming an indisputable engine for the economic recovery of our country and is reaching all-time highs. And not only in the field of exports. Foreign investment also performed well, according to FDI Markets, and Spain was the third global destination for foreign greenfield projects in 2021, standing out in innovative activities with a high technology content”.

Technology, renewable energy and food safety-agritech are destinations for the investments
The sectors of greatest interest to the funds worldwide, by number of transactions, continue to be led by technology, which represented almost 42% of the total transactions. A growing number of these transactions were carried out with co-investments from venture capital industry leaders. The report, which analysed 1,900 co-investments, highlights Sequoia, Tiger Global and NEA as some of the usual partners for sovereign wealth funds, although unconventional investors in this type of asset, such as Goldman Sachs and BlackRock, are increasingly acquiring a more significant role.

“For the first time sovereign wealth funds exceed 10 billion dollars in assets under management. This historic milestone is framed within an economic and social transformation process accelerated by the pandemic and the geopolitical crisis. The funds are transforming at the same pace, with direct transactions in unlisted companies shooting up. Private technology companies in a wide range of industries are increasingly attracting more institutional money, where there is no lack of sovereign wealth funds. Their long term perspective enables them to commit to companies that are transforming the way of fighting climate change (committing to renewables, and new energies like fusion); understanding money and transactions (fintech and crypto); providing good safety (agritech); and accelerating a more circular economy (recycling and sustainable production)”, pointed out Javier Canapé, director of Sovereign Wealth Research at the Centre for the Governance of Change at IE University..

Within the technology industry, software and fintech companies and neobanks, or those related to cryptocurrencies, are just some that have received a greater injection of sovereign wealth capital. Biotechnology and health technology companies continue to be favoured by the 90 funds analysed in the report, with transactions in 15 different countries, from Finland and Vietnam to Spain, where GIC, the Singapore sovereign wealth fund, invested 1 billion via its subsidiary in the USA, Biomat.

Renewable energy sources were another industry that increased investments from sovereign wealth funds last year. Sustainability is gaining ground as a significant factor for these investments.

The Sovereign Wealth Funds Report 2021, prepared by the Centre for Governance of Change at IE University in collaboration with ICEX-Invest in Spain, analyses 448 transactions worth 120 billion dollars. This growth triples the sums in the previous Report and makes 2021 the richest year in history.