Confidence is high as funds flock to register with the Portuguese stock exchange as they target regulated assets and real estate opportunities
Private equity (PE) funds have shown renewed interest in Portugal in the wake of the troika deal and continue to search for investment opportunities, instilling confidence in the country's economy, according to Lisbon-based law firms consulted by Iberian Lawyer.
Linklaters corporate finance partner Marcos de Sousa Monteiro says that between 30 and 40 per cent of the M&A deals in Portugal in 2015 involved PE funds. He adds: "Throughout 2015 and into 2016 we saw a continuous and fairly steady market share and volume of work triggered by investments and divestments by PE firms in Portugal." Sousa Monteiro says that private equity funds are particularly attracted to investments in regulated assets, as well as real estate opportunities.
Sousa Monteiro adds that PE interest in Portuguese assets is a boost for the country's economy. "It portrays a high level of confidence in policymakers that has not been affected by the country's recent elections," he says. "Some of the deals we have seen are PE funds divesting, but they are being acquired by other PE or infrastructure funds, which also exemplifies the renewed confidence in Portugal." However, while a continuation of the current levels of PE investment is expected over the coming months, uncertainty regarding the stability of the Portuguese government may prevent an increase in PE deal flow.
The increase in PE investment in Portugal is due to the country's swollen public-sector debt, according to Duarte Schmidt Lino, the partner who heads PLMJ's private equity practice. He says that he envisages PE investment in Portugal growing because banks will "no longer fund every need of Portuguese corporates".
Schmidt Lino points out that 83 new private equity...