Bill Gates is synonymous with Microsoft Corp. (NASDAQ: MSFT). His private investment vehicle is known for making some rather interesting moves in the United States and internationally. The one that has to stand out more than any right now is that Gates has taken a large stake in a Spanish building company called Fomento de Construcciones y Contratas (FCC). We would point out that this stake may be misunderstood with regard to the real direction of the company.

Is this confirmation that the PIIGS are through their mess? Probably not, on an all-or-none basis, but it shows that capital will reinvest itself when opportunity becomes cheap enough to be worth the risk. It also shows that you have to look beyond a company’s past. When Gates invests privately, it is a cross between private equity and activist investing, blended with a futurist mind-set.

Gates has invested some $155 million for a 6% stake in FCC. This is a construction and environmental services company, and supposedly it was seriously at-risk during the recession. By our count, construction growth in Spain is still likely some time off, after the real estate bubble. We are operating under the assumption that banks are holding billions upon billions of troubled loans that would have been foreclosed on if the banks actually could absorb the real losses. Again, this stake may simply be misunderstood.

Perhaps the company’s future is more on environmental services and infrastructure than how it is portrayed. We see that FCC posted sales of more than 11.5 billion euro in 2012, and the company said that some 56% of sales came from international markets, mainly Europe and United States. Suddenly this is a different story. If you look at the company’s website it claims to have a balanced business model:

• The Infrastructure division works in the areas of construction and industrial activity.
• The Services division covers two large areas: environmental services and services for citizens.
• Energy is a business area that is undergoing a process of consolidation, and which generates business in the field of renewable energy.

What the markets are proving is that there are never any true instances where you cannot be surprised. This does not make sense on the surface, if you just consider the construction aspect of the business. Perhaps it is the rest of the company where the value is. Gates has been way ahead of the rest of the markets on some investment trends from his non-Microsoft efforts.

FCC shares were up more than 7% in local trading. Maybe Gates is on to something here.

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