Shahmar Movsumov: Brexit talks had no dramatic impact on SOFAZ portfolio - EXCLUSIVE

The investment returns of the State Oil Fund of Azerbaijan (SOFAZ) in real estate in Great Britain makes 4.4%, SOCAR CEO Shahmar Movsumov said in an exclusive interview with Report, commenting on the impact of Brexit on the Fund's invetsment returns in real estate in London.

"As you know, in 2012, the Oil Fund bought an office complex in the West End, located at 78 St.James street with return making 4.4% from the moment of purchase," Movsumov noted.

He added that SOFAZ's investment priorities depend on the global economic trends that are studied before adopting an investment policy.

"As an investor with highly profitable investments, the Oil Fund keeps track of the processes ongoing on the markets and adheres to the rules of ensuring optimal diversification and reducing risk of investment portfolio volatility. The tactical changes, related to global processes, are always on SOFAZ agenda. As is known, the Brexit talks have been held from mid 2016 and against the market volatility after the announcement of unexpected results of voting, the current fluctuations are insignificant and have no dramatic effect on the Fund's portfolio," the fund's CEO said.

All the same, he noted that in line with SOFAZ's investment policy, the investments in pounds do not exceed 5% of the total investment portfolio.

The State Oil Fund was established in 1999 and for that moment its assets amounted to $271 mln. As of March 31, the SOFAZ assets reached $40,273,300,000, 4.56% more than in the beginning of 2019 ($38,515,200,000).

Under the SOFAZ regulations, its assets can be used for construction and reconstruction of strategically important infrastructural facilities, as well as the settlement of major national problems.

The main goals of the State Oil Fund include accumulation of funds and their placement abroad to minimize the negative impact on economy, prevent the 'Dutch disease' to some extent, ensure accumulation for future generations and support current socioeconomic processes in the country.