Funds continue shopping spree in Portugal

Despite the Covid-19 pandemic, large international funds are continuing to make acquisitions in the Portuguese market.

According to TTR, investment turnover soared 24% in 2020 to €18.4 billion. This year the investment amount has been less, but nevertheless still high considering the economic recession caused by the pandemic.

The big ticket fund purchases include 25% of the owners of the Continente supermarket chain, Sonae MC, by the large private equity company CVC which goes to show that Portugal is still in the sights of large international funds and equity management companies.

This is because assets in Portugal are at attractive prices and provide stable rents with a potential for these assets to gain in value over time.

Data from the financial platform lists €6.7 billion in mergers and acquisitions (M&A) either completed or to be completed this year, down 38% on 2020, yet in terms of the number of deals, these have gone up by 31.5% to 267.

“Portugal is a peripheral market with assets at attractive prices which do not pose a particularly high level of risk”, says Luís Valença Pinto who heads the venture capital department of Haitong Capital in an interview with the online news source ECO.

The capital markets expert says “funds seek out sectors that are cushioned (against shocks and fluctuations) or when dealing with companies on the open market, those which have a huge client base and stable business flows.”

In Portugal, European investors dominate the scene, but there are also capital funds from Canada and South Korea. Some are pension and infrastructure funds that are looking for regular and reliable business cashflow streams with a capacity for inflation to be reflected in the amounts charged to clients, as is the case with motorway toll concessions such as Brisa.

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