Azernews.Az

By Nigar Abbasova

Azerbaijan’s state oil fund SOFAZ, which accumulates and manages oil and gas revenues of the country, plans to increase the volume of investments made in risky shares.

Given the sharp drop in oil prices, the Fund started to diversify its investment portfolio with more risky shares.

Deputy CEO of SOFAZ Israfil Mammadov told Nikkei Asian Review that the Fund may also increase its private equity from 15 up to 25 percent.

The assets of the Fund currently amount to some $33.7 billion, with some 80 percent of the volume falling to a share of bonds and short-term financial instruments. He also mentioned that the Fund may also increase its investments in real estate from 5.5 to 10 percent.

An ultimate goal of SOFAZ is to create highly-structured portfolio, reflecting a number of directions. Investing in real estate is considered to be one of the most revenue-generating and safest kinds of investment in the world, as it cannot be lost or stolen.

SOFAZ also uses the practice of investing in real estate located abroad.

Last year, the Fund jointly with Mitsubishi UFJ Trust and Banking Corporation acquired landmark retail property Kirarito Ginza in Tokyo for nearly $496 million. The deal became the first real estate investment of the Fund in Japan. The property, which is located in one of the most prestigious retail locations in Japan, was purchased from Elliott Advisors Asia Limited and Orix Corporation.

Mammadov added that SOFAZ also invests in Funds, engaged in the development of real estate in Japan, including logistics centers and property, located in different cities of the country.

Moreover, the Fund also purchased Gallery Actor, a mixed-use office and retail complex located on Pushkin Square in Moscow, an office complex in London's West End, a property in Paris, and Pine Avenue Tower in Seoul.

The Fund plans to increase its assets by $1 billion in 2017.

The Fund’s transfers to the 2016 budget are forecasted to stand at 7.6 billion manats ($4.6 billion), while the forecasted index for 2017 stands at 6.1 billion manat ($3.7 billion).

SOFAZ's primary objectives are to help maintain macroeconomic stability in the country and to generate wealth for present and future generations.

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Nigar Abbasova is AzerNews’ staff journalist, follow her on Twitter: @nigyar_abbasova

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