WB Treasury to assist in developing SOFAZ strategy
Azerbaijan, Baku, June 3 /Trend E. Ismayilov /
The State Oil Fund of Azerbaijan (SOFAZ) is attracting foreign consultants to develop a new investment strategy, SOFAZ Executive Director Shahmar Movsumov said.
"A WB Treasury mission plans to visit Azerbaijan," he said. "SOFAZ plans to finalize a strategy with the mission's assistance."
He said that SOFAZ expects to complete preparation of a new investment strategy by late 2011.
As SOFAZ's assets are growing, it becomes necessary to use new instruments, Movsumov reported earlier. One of such instruments is the real estates, he said.
According to the adopted 2011 Program of main directions of use of SOFAZ assets, the combined portfolio of SOFAZ investments is forecasted at 19.4 billion manat. The liquidity of SOFAZ assets should be no less than $100 million for the reasons of timely, full performance of transfers in conformity with the SOFAZ budgetary expenditures.
Not more than $600 million of SOFAZ currency assets may be invested in Caspian extractive industry development or in securities of major founders having long-term investment rating.
The Oil Fund may pass up to 60 percent of its portfolio of investments to a foreign management; however, a single foreign manager may not receive more than 15 percent of the portfolio's combined value under management. The benchmark for calculation of return of SOFAZ assets in an investment fund (except for portfolio management-related costs) is the three-month London InterBank Offered Rate (LIBOR).
In connection with the launch of the new strategy, SOFAZ Chief does not rule out the possibility of involvement of new foreign managers in work on SOFAZ assets management.
The SOFAZ does not expect managers to change or new managers to be involved in the work this year.
Though the results of operation of SOFAZ foreign managers were actually equal to zero in the crisis years, the situation became better last year as positive results were achieved.
The management of the SOFAZ assets yielded 62 million manat in the first quarter.
SOFAZ Managers are the World Bank's Treasury Department, Clarident (a division of Credit Suisse), and Deutschebank Asset Management.
As of April 1, 2011, SOFAZ's assets increased by 13.3 percent and hit $25,796.9 million on April 1, 2011 compared to $22,766.8 million in the beginning of the year.
The State Oil Fund was established in 1999 and had assets of $271 million at the time.
The official exchange rate is 0.7893 AZN/USD.