Tuesday, 03 March 2020 13:40

Portugal: an investment destination?

Nuno Maldonado Sousa, partner at Kennedys’ Lisbon office, has been working in the market for several years and has seen the changes occuring. Portugal is on the map for investors coming from Europe and South America but “hiring models have been institutionalized, which does not favor the dynamism and versatility that new projects require”, he says. So, how does that work in the end?

Do you consider that Private Equity is still important for the development of small and medium enterprises in Portugal?

When we talk about the Private Equity it is important to distinguish two realities that have very different characteristics; on the one hand, we have institutions constituted to finance companies by taking up capital positions, which also act as a guarantee for investment and, on the other hand, independent investors, usually acting in more or less organized groups, which channel capital from wealthy savers. We believe that venture capital remains a valid form of operation. In the second group of investors, we have seen interesting surprises. These groups of investors are usually composed of top managers who finance companies and projects to improve the performance of their assets. Although they do not perform executive functions, they have often brought the serenity that is lacking to younger entrepreneurs and knowledge of more sophisticated markets and are also channels that allow access to networks and markets. This is a reality to which we are attentive and the operations we have followed have been remarkably successful when measured in the medium term.

What you are saying is that startups are still a safe investment? Many projects ended up not having continuity 

The concept of a startup that we consider is the one we imported from the USA; they are companies that are vehicles of a project that sometimes is a success and sometimes is not. The successful ones have continuity; the unsuccessful ones don’t and so they liquidate quickly to free up resources for another attempt. The measurement of the outcome of the initiatives by the investor has to be done by the set of operations, in the medium or long term. Some investors perform well and others not so well. Atomized measurement does not seem to make much sense in this investment concept. Investment security is associated with the expected return; startups are part of the available means and have to be seen with their rating.

Did the market change a lot?

We usually follow operations on the financed side, which only allows a very partial view of the sector. The impression we get is that hiring models have been institutionalized, which does not favor the dynamism and versatility that new projects require. To have winning projects it is necessary to adopt adequate, tailor-made solutions and this requires bold decisionmakers.

Are foreign funds interested in the country?

We have had requests from groups of foreign investors who want to develop SMEs (Small and medium-sized enterprises) with moderate investments, mainly from Europe and South America, which we have channeled to the appropriate agents. There are interests and operations will continue to appear.
The CMVM (Securities and Exchange Commission) has criticized the excessive weight of granting loans, namely through shareholder loans, to companies in which risk capital is involved, “very close to the banking activity”, they say.

What is your opinion?

It is a trend we have seen from venture capital institutions but we no longer see it when we talk about groups of investors, who normally share the financing of projects with other sources, in a programmed manner. It seems to us the preferable solution, to insert the financed companies in the market. It then evaluates the projects and forces the entrepreneurs to compete daily and exceed their performance. We believe it is healthy to divide financing by equity - private equity - by public, national or European funds and bank credit. The presence of these entities in operations is a seal of the projects potential.

What are the most significant areas of investment?

The real estate sector has gained strength in recent years. The real estate sector is always a destination for investment in Portugal and we have also been following it. Nevertheless, we have seen these forms of financing appear associated with other areas of economic activity. The operations we have had in Portugal are mainly in the high technology sector, in life sciences and the provision of services to companies of high technical standards.

Article by Patricia Cardoso.

To read the article in full please download issue N.92 here

Iberian Lawyer
N.93 • April 2020

 
IL93 cover SP IL93 cover EN

The Latin American Lawyer
N.12 • March 23, 2020

LAL12 cover EN

IL LLabourAwardsPortugal 300x250 Finalists

Lexpo20 webbanner 300x100px v2

IL CaiadoGuerreiro 300x100

IBLLabourAwardsSpain Banner 300x250 Finalists 4

IL Lawit 300X100 October

IL LatamAwards STD 300x100 1

IL ExpertOpinionPodcast 1 300x250

This website uses cookies

We use cookies to ensure that we give you the best experience on our website. If you continue without changing your settings, we'll assume that you are happy to receive all cookies on the IberianLawyer website. However, you can change your cookie settings at any time. Learn more

I agree

What do I need to know about cookies?

A cookie is a small text file that’s stored on your computer or mobile device when you visit a website. We use them to:

  • Remember your preferences
  • Tailor our sites to your interests.

There are different types of cookies

First party cookies

These are set by the website you’re visiting. And only that website can read them.  In addition, a website might use a separate company to analyse how people are using their site. And this separate company will set their own cookie to do this.

Third party cookies

These are set by someone other than the owner of the website you’re visiting. 

Some IberianLawyer web pages may also contain content from other sites like Vimeo or Flickr, which may set their own cookies. Also, if you Share a link to a IberianLawyer page, the service you share it on (e.g. Facebook) may set a cookie on your browser.

The IberianLawyer has no control over third party cookies.

Advertising cookies

Some websites use advertising networks to show you specially targeted adverts when you visit. These networks may also be able to track your browsing across different sites.

IberianLawyer site do use advertising cookies but they won’t track your browsing outside the IberianLawyer.

Session cookies

These are stored while you’re browsing. They get deleted from your device when you close your browser e.g. Internet Explorer or Safari.

Persistent cookies

These are saved on your computer. So they don’t get deleted when you close your browser.

We use persistent cookies when we need to know who you are for more than one browsing session. For example, we use them to remember your preferences for the next time you visit.

Other tracking technologies

Some sites use things like web beacons, clear GIFs, page tags and web bugs to understand how people are using them and target advertising at people.

They usually take the form of a small, transparent image, which is embedded in a web page or email. They work with cookies and capture data like your IP address, when you viewed the page or email, what device you were using and where you were.

How does the Iberian Lawyer use cookies?

We use different types of cookies for different things, such as:

  • Analysing how you use the IberianLawyer
  • Giving you a better, more personalised experience
  • Recognising when you’ve signed in

Strictly Necessary cookies

These cookies let you use all the different parts of Iberian Lawyer. Without them services that you have asked for cannot be provided.

Some examples of how we use these cookies are:

  • Signing into the IberianLawyer
  • Remembering previous actions such as text entered into a registration form when navigating back to a page in the same session
  • Remembering security settings which restrict access to certain content.

Performance cookies

These help us understand how people are using the IberianLawyer online, so we can make it better. And they let us try out different ideas.
We sometimes get other companies to analyse how people are using the IberianLawyer online. These companies may set their own performance cookies You can opt out of these cookies here.Some examples of how we use these cookies are:

  • To collect information about which web pages visitors go to most often so we can improve the online experience
  • Error management to make sure that the website is working properly
  • Testing designs to help improve the look and feel of the website.
Cookie nameWhat it's for
Google DoubleClick The IberianLawyer uses Google DoubleClick to measure the effectiveness of its online marketing campaigns.Opt-out of DoubleClick cookies
Google Analytics From time to time some IberianLawyer online services, including mobile apps, use Google Analytics. This is a web analytics service provided by Google, Inc. Google Analytics sets a cookie in order to evaluate use of those services and compile a report for us.Opt-out of Google Analytics cookies