Azerbaijan’s SWF eyes US$1.8 billion in RMB investments

17 June 2014   Category: News, Asia, China, Global   By Daniel Shane

Azerbaijan’s sovereign wealth fund (SWF) will invest up to US$1.8 billion in RMB-denominated assets this year, according to its chief executive officer.

The former Soviet country’s State Oil Fund of Azerbaijan (SOFAZ) has approximately $36.6 billion in assets, and is in the process of securing its QFII quota from Chinese financial regulators, Shahmar Movsumov told the Financial Times.

“It’s one of the currencies that are becoming important, so why not invest in RMB? We are in the process of getting all the necessary preparations,” he said.

Mr. Movsumov did not specify which RMB-denominated asset classes SOFAZ would be investing in, stating it was “open to everything”.

In the last two years, SOFAZ has diversified away from its traditional holdings of US dollar and euro-denominated debt into assets including real estate and private equity.

At the end of last year, Mr. Movsumov told the newspaper, the fund decided to increase its exposure to assets in currencies either than the dollar, euro and UK pound to 10%. Half of this percentage is yet to be allocated, he said, but will be invested in RMB-based assets, he added.

The former Soviet bloc is home to some of the world’s richest SWFs, including Kazakhstan’s Samruk-Kazyna and Kazakhstan National Fund, with $77.5 billion and $68.9 billion in AUM, respectively.