The Oman Investment Authority (OIA) and the Spanish state-owned trading company Cofides have jointly announced the launch of the Spain Oman Private Equity Fund II (SOPEF II). This innovative fund is designed to make strategic investments in medium-sized companies in Oman and other select markets.
The unveiling of SOPEF II took place during the annual meeting of the International Forum for Sovereign Wealth Funds held in Madrid, Spain, over the weekend. The event was attended by notable figures, including Abdulsalam bin Mohammed al Murshidi, Chairman of the Oman Investment Authority, and Omar bin Saeed al Kathiri, Ambassador of the Sultanate of Oman to the Kingdom of Spain.
SOPEF II follows in the footsteps of its predecessor, SOPEF I, which was established in 2018 and has delivered a commendable net Internal Rate of Return (IRR) of approximately 13.8 percent to date. This new fund is expected to attract substantial interest from Spanish companies eager to expand their presence in Oman and other emerging markets.
The core objectives of SOPEF II encompass diversifying investments within OIA’s Future Generations Fund, generating financial surpluses, facilitating the transfer of knowledge and technology from Spanish enterprises to the Omani market, and fostering economic growth in both nations.
The launch of SOPEF II marks a significant milestone in enhancing economic relations between Oman and Spain, promising increased investment and job creation.
The fund’s primary success indicator is to achieve a net IRR of at least 15 percent. Given the strong track record of SOPEF I and the attractive investment prospects in Oman and its target markets, fund managers are confident in their ability to attain this goal.
The benefits of SOPEF II are manifold for both Oman and Spain. Oman stands to gain from increased investments by Spanish companies, the transfer of valuable knowledge and technology, job creation, and economic expansion. For Spain, this fund represents an opportunity to access new markets, boost exports, and strengthen bilateral economic ties.
Abdulsalam bin Mohammed al Murshidi, Chairman of the Oman Investment Authority, stated, “At the Oman Investment Authority, we are working on managing many joint projects that stem from bilateral relations and strategic partnerships with various countries. These steps come from the economic diplomatic efforts made by the Sultanate of Oman, which reflects its vision of establishing unified, mutually beneficial economic partnerships.”
Jose Luis Curbelo, Chairman of the Board of Directors of Cofides, added, “We are pleased with the success achieved by the Omani-Spanish Fund since its establishment in 2018, which has become an essential tool for enhancing competitiveness between the two countries. We hope that the new fund will continue the same approach in helping Spanish companies grow.”
In another positive development, Oman’s private sector demonstrated robust growth in the second quarter of 2023. The sector’s total value added by active organizations surged by 10.9 percent to reach $23.4 billion, compared to the same period in 2022. This growth was witnessed across major institutions, medium-sized enterprises (SMEs), and small enterprises. The private sector’s expansion also resulted in an increase in the number of workers and institutions.
This remarkable growth in the private sector is instrumental in diversifying Oman’s economy, reducing its reliance on oil and gas. The government’s supportive measures, including regulatory streamlining and financial incentives, have contributed to this positive trajectory.
According to the International Monetary Fund (IMF), Oman’s economy is expected to grow by 1.7 percent in 2023. This growth will be driven by a rebound in the hydrocarbon sector and continued expansion in the non-hydrocarbon sector. The government’s strategic investments in technology, infrastructure, and various industries are anticipated to further bolster economic prospects.
As Oman and Spain strengthen their economic ties through initiatives like SOPEF II, the future holds promising opportunities for both nations, fostering growth, innovation, and mutual prosperity.
