SOFAZ’s assets expected to rise by $2.3B this year

Baku. 4 February. REPORT.AZ/ State Oil Fund of Azerbaijan (SOFAZ) expects its assets to rise by $2.3 billion and hit a record high of $40 billion this year, Executive Director Shahmar Movsumov said in an interview to Bloomberg.

In 2012, Sofaz started to diversify by adding gold, equities and real estate. While the regulations allowed the fund to invest as much as 25 percent of its holdings in equities last year, it opted to keep those investments as low as 13 percent to 14 percent.

Movsumov also spoke about SOFAZ’s investment policy and said that it avoided losses thanks to the decision not to increase pressure on equities: “We decided that it was not the right time to increase investment in equities, and we were right. As life showed, last year was a very bad year for equities. Our peers made a lot of losses because of a bigger allocation into stocks."

SOFAZ had had more success investing in real estate, which has generated a “very steady income,” Movsumov said. It’s bought commercial real estate in London, Paris, Milan, Moscow, Seoul and Tokyo, and is still looking at markets in Europe, North America and Asia for more opportunities. There’s more interest in Asia because of better prospects for economic growth, he said.

SOFAZ had had more success investing in real estate, which has generated a “very steady income,” Movsumov said. It’s bought commercial real estate in London, Paris, Milan, Moscow, Seoul and Tokyo, and is still looking at markets in Europe, North America and Asia for more opportunities. There’s more interest in Asia because of better prospects for economic growth, he said.

While the fund has carried out direct acquisitions of real estate in previous years, nowadays it prefers investments via real estate funds because direct acquisitions requires more resources, Movsumov said.