IFSWF Santiago Principles

Santiago Principles Self-Assessment


    Institutional Framework and Governance Structure.
    Principle 6

    6. The governance framework for the SWF should be sound and establish a clear and effective division of roles and responsibilities in order to facilitate accountability and operational independence in the management of the SWF to pursue its objectives.

    As generally described in section I.1 in fine, Funds are administrated by its respective EC/TIC and managed by COFIDES (“Manager”).

    The division of roles and responsibilities are clearly stablished by the Regulation 1226/2006 (see sections 8 and 9) for FIEX and FONPYME. 

    In general terms, the EC is responsible for the final decision on investments and disinvestments, the review of the portfolio, the approval of the Funds Annual Accounts and Report, and the oversight over Manager’s activity. EC meetings are held on a monthly basis.

    For FONREC the division of roles and responsibilities are clearly stablished by the Regulation 5/2021 which says that a TIC is created as a collegiate inter-ministerial body attached to the Ministry of Industry, Commerce and Tourism, whose composition, operation and competences will be regulated by an Agreement of the Council of Ministers. The TIC will be the control and monitoring body of the operations carried out by the COFIDES.

    The CM 15/6/2021 Annex IV describes the composition (section 2) and responsibilities (section 3) of TIC. 

    Those are generally to approve investment, divestments, review of the portfolio and oversight of COFIDES activity. 

    COFIDES, as the Funds’ Manager, is responsible for the day-to-day running of the portfolio, including inter alia the execution of investments/disinvestments approved by EC /Technical Investment Committee, monitoring of portfolio companies, accounting, depositary and other related administration tasks. 

    7. The owner should set the objectives of the SWF, appoint the members of its governing body(ies) in accordance with clearly defined procedures, and exercise oversight over the SWF’s operations.

    The objective of the Funds has been set by Law 66/1997 (see Section 2) and, therefore, it cannot be changed save as by means of a change of said law for FIEX and FONPYME; and Regulation 5/2021 for FONREC

    Oversight by the Funds’ owner (i.e. Spanish Central Government/State) is developed by the state agencies that audit public sector (IGAE and Tribunal de Cuentas -see Section 12).

    Likewise, structural changes in the Funds can be made by means of new regulations enacted by the owner, amending therefore the Development Regulation.

    For FIEX and FONPYME, the composition of the EC is directly set up by the Development Regulation. They are formed by:

    A president, who by legal provision is the Secretary of State for Commerce.

    A first vice president, who is, by legal provision, the general director of International Trade and Investments.

    A second vice president, who by legal provision is the president of COFIDES.

    Twelve additional committee members:

    Five representatives of the General Directorate of International Trade and Investments

    One representative of the General Directorate of Industry and of the Small and Medium Enterprises.

    Two representatives of ICEX Spain Export and Investment.

    One representative of the General Secretariat of the Treasury and Financial Policy

    One representative of the State Secretariat for Budgets and Expenditures.

    One representative of the Official Credit Institute, ICO

    One representative of the General Secretary of the Industry and of the Small and Medium Enterprises.

    A secretary, without voice or vote.

    Except for the president and first and second vice-presidents, whose appointment as members of the Committees is automatic because of their position in government, the remaining members must be appointed by the Minister of Industry, Trade and Tourism, at the proposal of the Secretary of State for Commerce.

    The mandate of the members of the Committees, except for those who are due to their position (president and vice-presidents), is renewable every two years.

    One of the functions of the EC is the reporting to the Spanish Central Government, on the following items:

    Annual Accounts and Report of the Fund.

    Proposal on Fund’s allocation to be included in the Annual State Budget.

    From time to time, proposal on any change deemed necessary in the Fund’s regulation.

    For FONREC, the TIC is formed by nine members. 

    The Presidency will be held by the person in charge of the State Secretariat of Commerce, of the Ministry of Industry, Commerce and Tourism. The meetings of the TIC shall always be chaired by the Chairperson or the person who deputizes for her/him.

    The person in charge of the Directorate General for Trade Policy, of the Secretariat of State for Trade, who shall be the First Vice-Chairman of the TIC.

    The person in charge of the General Directorate of International Trade and Investments, of the Secretariat of State for Trade.

    The General Director of Industry and Small and Medium Enterprises, of the General Secretariat of Industry and Small and Medium Enterprises.

    Two representatives of the Secretariat of State of Economy and Support to the Company.

    A representative of the Secretariat of State of Tourism.

    A representative of the SEPI

    The President of COFIDES.

    8. The governing body(ies) should act in the best interests of the SWF, and have a clear mandate and adequate authority and competency to carry out its functions.

    The governing body of the Funds are the EC (one for each, but with the same members for both bodies), as per article 116.1 Law 66/1997 for FIEX and FONPYME.

    Role and responsibilities of the EC are defined in articles 3 (FIEX) and 11 (FONPYME) of the Development Regulation, including a list of administration functions:

    Evaluate and approve or deny the operations proposed by the Manager.

    Analyze and assess the evolution of the portfolio investments and approve, if required, the measures considered appropriate to ensure the smooth running of said operations to fulfil the objective of the Funds.

    Propose to the Government, through the Secretary of State for Commerce, any proposals deemed necessary to ensure the proper functioning of the Fund

    Approve and send to the Minister of Industry, Trade and Tourism and to the General Intervention of the State Administration (IGAE) the annual accounts of the Fund, as well as the annual report.

    Establish a financing limit per operation under operational criteria and to avoid excessive concentration of risks, based on the annual increase in the Fund's endowment, as well as any other operational limits deemed necessary to establish, to ensure the proper functioning of the Fund and risk monitoring.

    Evaluate and approve the collaboration agreements.

    Approve the preliminary draft annual budgets of the Fund for submission to the Minister of industry, Trade and Tourism in accordance with the provisions of article 33 of Law 47/2003, of November 26, General Budget. 

    Verify the adequacy of the Manager's remuneration set by Law 66/1997.

    Approve due diligence cost.

    Request the Manager any information necessary to assess the risks assumed by the State as well as determine the economic-financial information that must be sent specifically or periodically to the EC.

    Establish the eligibility criteria for investments.

    Any other inherent in the administration of the Fund.

    Role and responsibilities of the TIC are defined in articles 3 of CM 15/6/2021, including a list of administration functions.

    Approve investments

    Evaluate the evolution of the portfolio and take measures appropriate to ensure the smooth running of the Fund and compliance with its objectives

    Approve execution of certain actions, including but not limited to divestments, reductions and waivers, accession to creditors' agreements, refinancing, restructuring, renegotiations, acknowledgments of debt or judicial or extrajudicial transactions

    Approve submission to arbitration or other means of conflict resolution of disputes, the abandonment of legal actions already initiated or the temporary waiver of the exercise of legal actions

    Propose to the Government, through the Directorate General for Commercial Policy, any actions that may be considered necessary for the purpose of ensuring the correct operation of the Fund.

    Establish a risk appetite framework

    Verify the correct application of the criteria for calculating the Manager's remuneration, as well as to ratify the payment of such remuneration.

    In general, to carry out the control and monitoring of the transactions carried out by the Manager with charge to the Fund, as well as to exercise any other powers deriving from the provisions of the Royal Decree-Law.

    The ECs/TIC approve the respective Operational Guidelines, which is a compendium of investment and divestment procedures, including eligible investments, operating issues and reporting activities.

    9. The operational management of the SWF should implement the SWF’s strategies in an independent manner and in accordance with clearly defined responsibilities.

    For FIEX and FONPYME, Law 66/1997, in number 2 of its article 116, the designation of COFIDES as manager of the Funds, in its own name and on behalf of the Funds. And For FONREC Regulation 5/2021, article 17.

    Operational management role and responsibilities of COFIDES, as Fund manager, are listed in articles 5 (FIEX) and 13 (FONPYME) of the Development Regulation, including inter alia: 

    Evaluate investment proposals

    Submit to the EC/TIC such proposals

    Perform legal and financial closing 

    Monitor portfolio investments

    Represent the Funds in the decision-making bodies of portfolio companies

    Monitor the activity of capital expansion funds or private equity funds participated by the Funds and participate in their decision-making or administration bodies, if this does not entail that COFIDES assumes direct management of the companies in which the fund invests.  Act as depositary of the financial documentation of investments.

    Do administration tasks with the strictest principles of financial prudence.

    Propose to the EC/TIC divestments

    Act legally in the interest and on behalf of the Funds

    Sign collaboration agreements that may take place with other investors who wish to participate in the activities of the Funds

    To propose to the EC/TIC a limit of assumption of risk per investment, as well as any other operational limits that are considered necessary to establish, to ensure the proper functioning of the Funds and risk monitoring.

    Act as Secretary of the EC/TIC

    Undertake differentiated and independent accounting for each Fund.

    Prepare the annual budgets of the Funds

    In general, the Manager will carry out all those actions and initiatives that are necessary for the proper functioning of the Funds and will provide the EC/TIC with all the information and documentation it requests.

    For the execution of these management activity, COFIDES structure includes: 

    Chairman /CEO, General Manager and General Secretary, usual roles for the positions.

    Business development: identification of new investment opportunities

    Investment and Portfolio management: analysis of investment opportunities, negotiation of investment terms and conditions, legal and financial closing of investments, monitoring throw out the investment life and divestment 

    Risk management: second opinion on every investment decision, monitoring and divestment; portfolio review to direct the business development effort (i.e. countries, industries, size of investee companies)

    Impact and Sustainability: review of impact, environment and social risk of invested companies.

    Finance department: accounting and treasury management 

    Department for internal controlling, auditing and quality: compliance usual roles.

    COFIDES Board of Directors, set up by representatives of its shareholders (with the Spanish public State with a majority stake).

    COFIDES Steering Committee is composed by its chairman /CEO of COFIDES, the general director and the deputy directors of each area.

    It is the responsibility of the Steering Committee to analyze and approve/deny all those issues that must be presented to the EC of the Funds and those that are strategic, routine or specific that are relevant for the proper functioning of the Funds, among which are:

    Documents and reports that must be submitted to the instances referred to in the previous paragraph or to other instances. By way of example and not limitation, the following should be noted:

    Proposals for investment operations, divestment, refinancing, and other in the portfolio companies.

    Proposal for a Strategic Plan, Commercial Plan, portfolio companies monitoring, E&S monitoring plan.

    Economic-financial information - Activity Reports, Financial Statements, budgets, other accounting and management documents.

    Other matters such as Country Reports, four-monthly updates of the price grid, project reports with judicial proceedings in progress.

    Corporate management issues: Objectives and monitoring of Objectives, HR, IT, legal compliance matters, Internal Control and quality including updates of Operating Procedures, Internal and external audits, authorization of contracting of suppliers 

    Any other issues, initiatives or weekly priorities deemed appropriate to address the proper functioning of the company.

    Each deputy director is responsible for implementing in its department the decisions taken by the EC and the Steering Committee.

    COFIDES Steering Committee task and responsibilities are set in the internal management regulations of COFIDES and publicly disclosed for all COFIDES employees. 

    10. The accountability framework for the SWF’s operations should be clearly defined in the relevant legislation, charter, other constitutive documents, or management agreement.

    As mentioned in sections 6 to 9, accountability framework is defined in the Law 66/1997 and Development Regulation for FIEX and FONPYE and Regulation 5/2021 for FONREC.

    Therefore, no other incorporation/constitutive legal documents or management agreements exist.

    11. An annual report and accompanying financial statements on the SWF’s operations and performance should be prepared in a timely fashion and in accordance with recognized international or national accounting standards in a consistent manner.

    The Funds annual report and financial statements include in its management report, a brief monitoring of the portfolio companies only disclosed to the EC/TIC and the IGAE (general intervention of the state administration, which is the auditing entity of public companies and entities - see section 12).

    The Funds’ financial statements are prepared under Spanish GAAP for funds.

    The financial statements include information about contingent liabilities and off-balance sheet items.

    12. The SWF’s operations and financial statements should be audited annually in accordance with recognized international or national auditing standards in a consistent manner.

    The financial statements are subject to yearly auditing procedure of IGAE. Those statements including the auditing report are public for review. 

    The General Comptroller of the State Administration (IGAE) is the internal supervisory agency of the state public sector, and the direction and management centre for public accounts.

    As a supervisory agency, the IGAE is responsible for verifying, through previous monitoring of legality, continuous financial control, public audits, and financial control of subsidies that the state public sector's economic and financial activity complies with the principles of legality, economy, efficiency and effectiveness.

    As a centre for the management of public accounts, it is responsible for providing reliable, complete, professional and independent accounting information about public management. In this regard, it is responsible for drafting the public sector’s financial accounts according to the methodology of the European System of National Accounts, the most specific result of which is the determination of the public deficit, which is essential to the nation’s economic life. It calculates the deficit for both the General Government and each of its sub-sectors.


    Additionally, on demand, the Court of Auditors (Tribunal de Cuentas) audits the operational activity of the Funds.

    The Court of Auditors is the external audit body recognized by the Spanish Constitution, which is configured as the supreme audit body of the accounts and the financial management of the public sector, without prejudice to its judicial function focused on the prosecution of accounting liability incurred by those who are responsible for the management of public funds.


    13. Professional and ethical standards should be clearly defined and made known to the members of the SWF’s governing body(ies), management, and staff.

    EC/TIC members are subject to the general liability regime for Spanish civil servants, which include the submission to the Code of Conduct provided by Chapter VI Title III of Law 5/2015. Additionally, EC/TIC president and vice-presidents, due to its condition as most senior official of the central administration ("alto cargo"), are subject to special duties of care in the exercise of their public activity, as provided by Law 3/2015. Specifically, EC/TIC members must refrain from participating in any decisions in case of conflict of interest.

    Most EC/TIC members are career top civil servants. Under the Spanish public system, civil servants accede via competitive process and career to become in a top civil servant is based on knowledge and professional merits. As mentioned in point 7 above, the composition of the EC/TIC is directly set up by the Development Regulation.

    EC/TIC members are subject to the general liability regime for Spanish civil servants. In particular, they must refrain from participating in any decision in case of conflict of interest.

    COFIDES staff (not civil servants) is largely recruited from private sector selected by a competitive process.

    The recruitment and recruitment processes are regulated by internal procedures and guarantee compliance with the criteria of transparency, publicity, concurrence, equality, capacity and merit.

    Members of the Steering Committee are usually selected from among senior staff when the necessity arises and based on experience, capacity and seniority.

    COFIDES has a Code of Ethics applicable to all employees, the Code of Ethics is part of the policies of good governance, regulatory compliance, criminal prevention and corporate responsibility of COFIDES.

    The Code includes both the conduct that COFIDES expects from its professionals and the Company's actions towards its stakeholders. The objective is to serve as a deontological guide establishing the values and commitments that will guide the professional activity in the Company:


    Members of the EC/TIC and Steering Committee are covered by insurance

    14. Dealing with third parties for the purpose of the SWF’s operational management should be based on economic and financial grounds, and follow clear rules and procedures.

    COFIDES has internal procedures to deal with third parties with regard:

    Suppliers and services providers hiring manual, based on the principles of publicity, concurrence, transparency, confidentiality, equality and non-discrimination, in accordance with Law 9/2017 on Public Sector Contracts.

    Money laundering prevention manual

    Anti-corruption manual

    Confidentiality manual

    15. SWF operations and activities in host countries should be conducted in compliance with all applicable regulatory and disclosure requirements of the countries in which they operate.

    The Funds’ investments are conducted in compliance with eventual and applicable regulatory and reporting requirement in host countries.

    FIEX`s and FONPYME’s investments are linked to internalization of Spanish companies, and mandatorily minority investments, so in principle do not affect host countries from a strategical or macroeconomic point of view. 

    FONREC investments are purely domestic, with no activity outside Spain 

    16. The governance framework and objectives, as well as the manner in which the SWF’s management is operationally independent from the owner, should be publicly disclosed.

    For FIEX and FONPYME, governance framework is based on Law 66/1997 and Development Regulation, which are legal provisions of public domain.

    For FONREC, governance framework is based on Regulation 5/2021 and CM 15/6/2021, which are legal provisions of public domain.

    In the same sense, independent operation of the Funds by COFIDES is public as set up in such legal framework.

    See referred legal framework at (Spanish language only available):

    https://www.boe.es/buscar/act.php?id=BOE-A-1997-28053 https://www.boe.es/buscar/act.php?lang=en&id=BOE-A-2006-19827&tn=&p=



    17. Relevant financial information regarding the SWF should be publicly disclosed to demonstrate its economic and financial orientation, so as to contribute to stability in international financial markets and enhance trust in recipient countries.

    Funds financial statements are public in COFIDES web page (only in Spanish):



    In COFIDES web page success stories are also published with non-sensitive data.


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    Principle 18

    18. The SWF’s investment policy should be clear and consistent with its defined objectives, risk tolerance, and investment strategy, as set by the owner or the governing body(ies), and be based on sound portfolio management principles.

    18.1. The investment policy should guide the SWF’s financial risk exposures and the possible use of leverage.

    18.2. The investment policy should address the extent to which internal and/or external investment managers are used, the range of their activities and authority, and the process by which they are selected and their performance monitored.

    18.3. A description of the investment policy of the SWF should be publicly disclosed.

    The Funds investment policy is included in the Operational Guidelines.

    For FIEX and FONPYME, the Operational Guideline is approved by the EC and was initially established in 2005. Since then, it was reviewed in 2011, 2015, 2017, 2019 and 2021.

    The Operational Guidelines states that FIEX and FONPYME can invest in:

    Viable private investment projects or commercial implementation abroad promoted by Spanish private companies.

    Viable private investment projects abroad promoted by private companies from other countries, provided there is “Spanish interest”.

    Viable projects of private investment abroad that the Spanish Trade Administration deems appropriate in response to reasons of general interest.

    Support to Spanish companies for internationalization, which can be linked to the fulfillment of an internationalization objective. Such compliance may be verified through the systematic observation of an internationalization variable, such as maintaining a certain amount of international equity or obtaining a certain international EBITDA.

    Investment in expansion capital funds that promote the internationalization of the company or the Spanish economy.

    For FIEX and FONPYME the investment policy adjusts tight to the objective of the fund contemplated in the Law (66/1997):

    Promote the internationalization of the activity of companies, and, in general, of the Spanish economy, through temporary and minority direct participations in the social capital of Spanish companies for their internationalization or of companies located abroad, and, in general, through participations in the own funds of the aforementioned companies and through any participatory instruments. Temporary and minority direct participations may also be taken in vehicles such as expansion capital funds that promote the internationalization of the company or the Spanish economy.

    Risk matrix is included in the same Operational Guidelines (see section 22). 

    For FONREC the Operational Guideline was approved by the TIC and was established in 2021.

    The Operational Guidelines states that FONREC can invest in:

    The purpose of this Fund is to strengthen and recover, in an agile and efficient manner, the solvency of medium-sized non-financial companies in any sector with a net turnover of between 15 and 400 million euros at the consolidated level and which, not having had viability problems prior to the Covid-19 crisis and being viable at

    medium and long term, the effects of the pandemic on their balance sheets and markets are affecting them.

    Strengthening solvency will also help to secure jobs, maintain and strengthen the productive net and promote the competitiveness of the Spanish economy.

    The Fund will provide temporary public support under criteria of profitability, risk and sustainable development impact.

    The Funds do not use any kind of leverage or speculative derivatives.

    The Funds, through COFIDES, have never used external investment managers. External Due Diligence is requested following market standards.

    A description of the Funds investment policy and how to apply to receive financial support is publicly disclosed in the COFIDES web page:



    19. The SWF’s investment decisions should aim to maximize risk-adjusted financial returns in a manner consistent with its investment policy, and based on economic and financial grounds.

    19.1. If investment decisions are subject to other than economic and financial considerations, these should be clearly set out in the investment policy and be publicly disclosed.

    19.2. The management of an SWF’s assets should be consistent with what is generally accepted as sound asset management principles.

    FIEX and FONPYME objective is to foster the internationalization of Spanish companies and Spanish economy and such main objective is set in the COFIDES web page. Together with the main strategic objective of the Funds, the Operational Guidelines set a financial and profitability objective disclosed as:

    Given that the FIEX and FONPYME investment returns are reinvested, to maximize the potential of the Funds, investments must be carried out in viable projects with a medium- and long-term profitability objective. The investment proposals shall have an adequate risk return profitability.

    Investment and divestment proposals, as well as portfolio monitoring, are undertaken by the investment department and reviewed by the risk management department. No proposal can be submitted for approval, without the countercheck of the risk management department. The review includes a risk return analysis.

    FONREC investments are supported by credit report from an external credit rating agency approved by ESMA (European Securities and Markets Authority). Its credit rating report serves as main basis for TIC decision making.

    On top of it the Compliance Department carry out periodical performance reviews.

    20. The SWF should not seek or take advantage of privileged information or inappropriate influence by the broader government in competing with private entities.

    COFIDES, on behalf of the Funds act always following the additionality principal, by which the offer of the Funds must be additional to the private financial sector and there is thus no concurrence with it.

    21. SWFs view shareholder ownership rights as a fundamental element of their equity investments’ value. If an SWF chooses to exercise its ownership rights, it should do so in a manner that is consistent with its investment policy and protects the financial value of its investments. The SWF should publicly disclose its general approach to voting securities of listed entities, including the key factors guiding its exercise of ownership rights.

    COFIDES exercise always its ownership rights and in a manner that is consistent with its investment policy to protect the financial value of the Funds’ investments.

    The Funds do not invest in public listed companies, do not held majority investments and cannot, following their incorporation Law, manage the investee companies.

    Thus, ownership rights are limited to the main corporate governance issues to protect its minority position, such as approval of financial statements, appointment of auditors, change of business, etc.

    Voting rights are delegated to COFIDES, and usually a senior analyst of the investment department represents COFIDES in the investee’s board of directors.

    The vote is either issued directly or by a proxy.

    As the Funds do not invest in listed entities, they do not public the general approach of ownerships rights.

    22. The SWF should have a framework that identifies, assesses, and manages the risks of its operations.

    22.1. The risk management framework should include reliable information and timely reporting systems, which should enable the adequate monitoring and management of relevant risks within acceptable parameters and levels, control and incentive mechanisms, codes of conduct, business continuity planning, and an independent audit function.

    22.2. The general approach to the SWF’s risk management framework should be publicly disclosed.

    23. The assets and investment performance (absolute and relative to benchmarks, if any) of the SWF should be measured and reported to the owner according to clearly defined principles or standards.

    There is a permanent review of investments in the portfolio and a review of the portfolio metrics. 

    Each investment is reviewed at least once a year and a check of the main financial, Impact E&S and any other risk is performed. Those risk are valued in the Rating tool and a new rating and scoring is assigned. 

    In case of special situations COFIDES carry out monitoring reports oftener (half-yearly to monthly).

    Portfolio reports with key indicators are displayed to the Steering Committee on a monthly basis and to the EC/TIC quarterly.

    Key indicators are new investment and divestment of current year, portfolio average rating, diversification by country, industry, ticket amount and investment product.

    An abstract of the main key indicators is included in the annual report and published in the COFIDES web page (Spanish language).


    24. A process of regular review of the implementation of the GAPP should be engaged in by or on behalf of the SWF.

    Preparation and implementation of the GAPP is led by the General Manager.

    A review of the implementation of the GAPPs will be done as required.