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Portugal 2019 | FINANCE | INTERVIEW

SONAE IM invests in budding technology retail markets, telecommunications, and cybersecurity solutions companies, in addition to helping launch them.

Carlos Alberto Silva
BIOGRAPHY
Carlos Alberto Silva is an executive board member and CFO at Sonae Investment Management, heading the investment activities in telecoms technology and cybersecurity. It is also responsible for the shared services division, which helps manage the portfolio companies. He has over 20 years of experience in the technology, media, and telecoms sector, having led numerous strategic projects in telecoms as well as several M&A transactions under several jurisdictions. He holds a degree and an MsC in electrical and computer engineering from the School of Engineering, University of Porto. He also received an executive MBA from the Porto Business School.

How do your platforms enable your clients to overcome complex IT challenges?

We were launched as the tech investment arm of SONAE Group in early 2016, building on a strong track record of launching tech companies and helping them grow internationally through organic growth or acquisitions. We have done acquisitions, namely, in the US, Brazil, the UK, and Ireland. We invest in three main areas: technology retail, telecom retail, and cybersecurity. Tech retail and telecommunications tech are easy to understand because the main assets of the group are mainly in those two areas. Cybersecurity started in 2013 when we identified it as a critical area, and we built up significant expertise throughout this period. Our main goal is financial returns; it is in fact our only goal. Being in a group with such a dimension, we explore the linkages of the portfolio companies and SONAE Group's businesses. We try to leverage our assets as much as possible, even as a key differentiating point as an investor.

What have been the crucial factors behind SONAE IM's presence in 13 countries?

It depends on the companies: These countries correspond to the footprint of the companies we control, but a significant part of our investments is also in minority stakes that are present in additional countries. The rationale is typically to expand to core geographies that in some cases work as hubs. It applies to the US, Brazil, and Mexico, and our offices there cover North America and South America. In the Asia Pacific, we are present in Malaysia and have a small presence in Australia that allows us to cover the region. Regarding cybersecurity, we have various offices around Spain and Portugal. We are also present in Mexico City because we need to follow the customer. Most of our customers in Spain are in Mexico and Latin America, so we naturally need to go there. It is a different approach to when one does technology, which results in international expansion.

What corporate synergies does your company gain from being part of the SONAE Group?

The main asset we leverage from SONAE starts with reputation; being a part of SONAE is an added value for us, not only in Portugal, but globally. Although SONAE is not that well known in the US, when we start to describe it, people begin to understand the group, and this certainly brings value. For a small country such as Portugal, being the biggest employer in terms of relative size compared to the country is extremely significant. In terms of assets, we leverage the expertise of the group in retail and telecoms. We liaise with the teams in this business and know the technologies we should invest in. We know their main pain points, and they know the dream technologies that could help them better do their job. These are the kind of interactions we have with them; we cross that with the market size, competitive landscape, and filter and select two or three technologies. For bigger investments such as cybersecurity, one thing we did was partner with NOS in Portugal to sell cybersecurity solutions through S21SEC. This is a strategic partnership that we are replicating in Spain, for example, with another operator, though it started here.

What are some of your top priorities for the coming two years?

Our priorities lie along the lines of what we have been working on recently: to continue to find the best investments available, nationally or internationally. In terms of economic exposure, we are more than 50% exposed to the international market. Portugal's economic boom is a critical factor, but more in the sense of attracting talent and investment to the country. It is critical in early-stage investments to attract international investment since the local market is not large, and those companies need help to expand internationally.