Royal Decree-Law creating the Co-investment Fund (FOCO) approved

The Council of Ministers has today approved the Royal Decree Law that provides for the creation of the Co-Investment Fund (FOCO). The management of the Fund is entrusted to COFIDES, given its experience both in structuring private sector investment operations and in managing state funds to support the internationalisation of the Spanish economy.

COFIDES expects to start evaluating the first investments of the fund in the first quarter of 2024, the purpose of which is to mobilise resources from foreign investors to Spain in activities mainly linked to the green and digital transitions of the national economy.

FOCO is a fund created by the Government through the addendum to the Recovery, Transformation and Resilience Plan (PRTR) and is funded by the NextGenerationEU instrument. FOCO's objective is to promote foreign investment in the Spanish economy, boosting access to financing for companies linked to the ecological and digital transitions, as well as those related to other strategic activities for Spain, such as sustainable mobility, infrastructure, sustainable agriculture and biotechnology.

The main features of the Co-Investment Fund are as follows:

The Fund will primarily make equity investments in private companies undertaking investment projects on the national territory.
FOCO investments will always be made jointly with a foreign co-investor. Co-investors may be: (i) private companies participating in corporate entities in Spain; (ii) foreign private (investment funds, pension funds, insurance companies, etc.) and public (public pension funds, sovereign wealth funds) institutional investors; (iii) domestic private investment vehicles and entities attracting foreign investors.
The contribution of foreign co-investorsmust be at least equivalent to FOCO's contribution.
The Fund will always take minority stakes and the sum of the total public capital in both companies and funds can never exceed 49% of the total capital for each operation.
The Fund will be valid indefinitely, so that the returns obtained from the investments financed will be reinvested in new operations in line with the strategy and objectives of the Fund, in order to continue supporting the challenges associated with the sustainable transformation of the Spanish productive model.

FOCO's funding may be direct funding in companies or indirect (fund of funds).

Direct investment:

Priority will be given to capital investments.
FOCO will align its profitability objective with that of the co-investors and will exclusively maintain a minority position in the projects.
Investment lines for the same company involving several projects may be financed as long as the maximum amount per company is not exceeded.
Minimum amount per transaction: 10 million.
Maximum amount per promoter: 150 million.

Indirect investment:

FOCO will invest mainly in Spanish equity funds or funds from other countries that include Spain as a destination for their investments.
The global portfolio strategy of the funds must have a solid track record in the strategic sectors defined by FOCO and investment teams with the experience and capacity to attract foreign investors to Spain.
Minimum amount per transaction: 10 million.
Maximum amount applicable to vehicles of the same management company: 150 million.

COFIDES chairman, José Luis Curbelo, assured that "after the experience of managing the FONREC fund, with which COFIDES managed the formalisation of 735 million euros in just eleven months, the company has demonstrated that it is ready and in full condition to take on this new challenge in order to commit the FOCO investment". It is a challenge for COFIDES to take on the management of this fund in order to promote the sustainable development of the Spanish productive fabric, thus contributing to improving the competitiveness of our economy," he added.

ABOUT COFIDES

COFIDES is a state-owned enterprise specialized in the management of State funds that provide medium- and long-term financing for private investments linked to different public policy purposes. COFIDES directly manages funds aimed at supporting the internationalization of Spanish firms, strengthening the solvency of companies severely affected by the COVID-19 pandemic, to attract foreign direct investment into Spain through co-investment deals and to contribute to the growth of the impact investment ecosystem in Spain. In addition, COFIDES supports the management of the financial cooperation portfolio of the Spanish Agency for International Development Cooperation, promoting sustainable development in emerging economies and developing countries. In the ownership structure of the Company, the Spanish State holds 53% of the equity. The remaining 47% is held by Banco Santander, Banco Bilbao Vizcaya Argentaria (BBVA), Banco Sabadell and Development Bank of Latin America (CAF).