Last year, private capital (private equity) invested in companies weighed only 0.026% of the Portuguese gross domestic product (GDP), show data from Invest Europe. Portugal is thus the third European country in which private capital weighs less in GDP, this investment being, in proportion, 13 times lower than that made by neighboring Spain (0.358%) and 19 times lower than the European average.
The country is thus light years away from France (where private capital weighs 0.819% of GDP), Luxembourg (1.193%) and, outside the European Union (EU), the United Kingdom (1.394%), with an investment proportional 53 times higher than the Portuguese. Worse than Portugal are only Greece (0.024%) and Romania (0.009%).
“It doesn’t make any sense for Portugal to continue at the tail of Europe when it comes to mobilizing private capital to invest in companies”, says Luís Santos Carvalho, recently elected president of the Portuguese Association of Venture Capital – APCRI, in a statement.
“The lack of capital is a central problem of the Portuguese business fabric: these numbers explain much of what has been the stagnation of the national economy and the inability of companies to generate more wealth”, continues the founder of the company. private equity Vallis Capital Partners. “That is why it is very important that the Government and the Assembly of the Republic change the mechanisms that, in the State Budget, prevent institutional investors in Portugal from investing assets in the national private capital and venture capital industry.”
According to APCRI, the private equity it is an indispensable instrument for the Portuguese economic model to overcome “the stagnation it entered two decades ago”, expressed, among other indicators, by the delay with which funds from European funds reach companies. “O private equity it serves, precisely, to capitalize companies, whether they are SMEs in need of restructuring, startups needing capital to start up or solid companies that need more capital and balance to grow in exports and in international contracts”, declares Luís Santos Carvalho.
“When an economy has a lot of debt and little capital, private capital is a partner with obvious virtues”, explains the president of APCRI. According to Luís Santos Carvalho, it is private capital that makes money reach the economy faster, also contributing so that other sources of financing – such as the European funds from the Recovery and Resilience Plan – PRR and the future Portugal 2020 – can actually arrive from efficiently, productively and competitively to the business projects it is supposed to support.
In Portugal, companies’ lack of capitalization means that two-thirds of their balance sheets are composed of debt and only one-third of equity, reveals APCRI. Numbers that contract with those of Germany – where two thirds are private equity and one-third debt – and from the United States, where equity represents, on average, three-quarters of the balance sheet.
In addition to contributing to increase invoicing, generate profits and create jobs, “the venture capital industry has also established itself as a profitable and safe application for its investors, with proven and verifiable performances”, declares the president of APCRI. It is this information that the association is currently aggregating in a study commissioned to ISCTE and which will be shared with the Government and the Assembly of the Republic: “there is no reason why Portuguese institutional investors cannot place a percentage in the national capital industry. , however small, of its applications”.
Source: Expresso by expresso.pt.
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