La Caixa prepares a strategic shift after years without major investments

Strategic shift in the banking foundation La Caixa. After a few years in which it has sold some of its main holdings (Abertis and Repsol, for example), the group had decided not to repeat major investments. On the contrary, it opted for diversification: a multitude of small investments that would allow it to spread the risk; to be more of a financial partner than an industrial partner. But this has begun to change, as advanced by La Vanguardia and confirmed by ARA.

"We are not exclusively focused on small stakes," sources now say from the black towers that La Caixa has in Barcelona's Avinguda Diagonal. "We are not abandoning diversification, but we do not forget what we did in the old days," they add. In the "old days", La Caixa acquired significant shareholdings that gave it control of large companies. The strategy "is becoming more nuanced," they now say.

The business holdings it has provide La Caixa with the income it needs to remain one of the leading foundations in Europe, with more than €500m annual budget dedicated to social work.

Lately, however, La Caixa's dependence on Natrugy has been exposed: the gas company has been its main dividend contributor since 2014. The Australian fund IFM launched a takeover bid to control at least 17% of Naturgy and failed, but has been left with almost 11%. This percentage is big enough so that, added to the other two large funds in Naturgy (Rioja and GIP), it exceeds 50% of the shares. Although this does not mean that La Caixa has lost control of the company (of which it is the largest shareholder, with almost 27%), there are now more threats than before on an energy group that last year contributed 55% of the dividends raised by La Caixa.

Presumably, the shift now designed by Isidre Fainé, president of La Caixa, will serve in the future as a plan B if the current balance is broken at some point. The truth is that the diversification of recent years has not brought very clear results so far: its two portfolios of small holdings in numerous Spanish and foreign companies only brought in €38m last year, only 6% of the dividends received by La Caixa. Be that as it may, this diversification will continue to exist, but it will coexist with new strategic bets.

More firepower

Soon La Caixa could have more firepower to consider a significant acquisition that it would not have been able to do in the past year and a half. On the one hand, its other major investee, CaixaBank, will begin to raise dividends once past the worst phase of covid. And on the other hand, the French groups Veolia and Suez will soon merge. This will take La Caixa, which controls about 6% in Suez, out of this company with a sum that will be close to €700m.

One of the options is to use this money to take control of water company Agbar, which will now be controlled be Veolia. However, it is not so obvious that Veolia would want to sell. Despite the fact that La Caixa is entering a new phase, the type of companies it is interested in have not changed: it is still interested in utility companies.

Currently, the group also controls (through its holding company Criteria) a stake of close to 5% in Cellnex, a thriving company but still not very profitable because it is investing many millions to finance its rapid expansion and, consequently, does not pay many dividends. Finally, they also have a real estate portfolio with assets valued at €3bn grouped in InmoCaixa, which has also been reinvesting its profits and has contributed little income.