Private equity funds and hedge funds from the US and the UK are eyeing Portuguese assets, while international companies are seeking to expand their operations
Portugal’s stabilising economy is making the country an increasingly attractive place to invest, particularly from the perspective of international investment funds.
“Both on the M&A and real estate side, the market has been very active as a consequence of the improvement in the economic situation,” says Maria João Ricou, managing partner of Cuatrecasas in Portugal. “We have been seeing a strong interest in Portuguese assets mainly from funds – private equity funds, investment funds, hedge funds – as well as from other types of investors, such as international companies, that want to expand or increase their presence in the Portuguese market.”
The majority of the investment – which is going into a broad range of sectors – is from the US and the UK. “The investors’ origins vary, but the major funds, as a rule, come from the US and also from the UK,” says Ricou. “The main sectors generating interest are real estate and tourism, as well as the infrastructure, energy and media sectors – the financial sector and distressed assets such as loan portfolios are also being targeted.”
Although there is a sense that the worst effects of the financial crisis – in terms of its impact on foreign investment – are easing, the fallout is yet to affect client expectations, particularly with regard to fees. “The major challenge is how to find the best balance between cost efficiency and having an organisational structure that has the capacity to respond to a high volume of work, and deliver top quality advice,” says Ricou. “Cost efficiency has become more than just a normal management concern and is an important issue due to the pressure clients in general keep putting on legal costs – it is something that was triggered by the financial crisis but remains a trend that is here to stay, and is also fuelled by a very competitive legal market.”