Sovereign Wealth Funds- Africa, Asia and Europe

December 26, 2012

Business, International

Nigeria: Sovereign Wealth Fund becomes operational March 2013

By Emma Ujah
Vanguard

December 21, 2012

ABUJA — The Nigeria Sovereign Investment Authority, NSIA, will become fully operational and commence investment in March 2013 following the approval of its Strategy Document by the Board of Directors.

According to a statement issued, in Abuja, yesterday, by Mr. Paul Nwabuikwu, Special Adviser to the Coordinating Minister of the Economy and Minister of Finance, Dr. Ngozi Okonjo-Iweala, the Strategy Document was ratified by the Board led by its Chairman, Alhaji Mahey Rasheed.

He said that the board met twice since its inauguration on October 9 to review and reshape the draft submitted by the management team led by the Managing Director, MD, of NSIA, Mr. Uche Orji, with a view to ensuring an accelerated preparation of blue print.

The Spokesman also revealed that the NSIA investment policy guidelines and the processes for the three fund mandates of the organisation have almost been finalised with efforts to hire its key personnel and acquire a functional office having reached an advanced stage.

Mr. Nwabuikwu quoted Dr. Okonjo-Iweala, as saying that with a world-class team of experts the NSIA would open a new vista of opportunities to rapidly grow the nation’s economy by attracting a high net worth of international investors to the country.

“There is still a lot of hard work ahead, we need to remain focused and disciplined so that we can reap the rewards. We are not yet there but we are on the right track. The question we must keep asking ourselves is: Other countries have benefitted from SWF. Why not Nigeria?”, she said.

Mr. Orji, who was appointed MD in October following an international head hunt, explained the status of plans to appoint a Chief Investment Officer, CIO, for the organisation:

“We are in the process of filling the role of the CIO. We received 300 resumes for the CIO role and will soon commence the process of short-listing the candidates. We hope to have the interviews early next year and have a CIO in place by early March”, he said.

He stated that other key management and staff positions in the NSIA will be advertised starting today (December 21) and projected that the full complement of staff would be in place by the first quarter of next year.

The MD assured that his team would maximize the business returns for Nigerians through a prudent of management of the fund and that the organization would have a lean operating model at the early stages.

He also emphasised that in seeking the best investments for Nigeria, the NSIA will not limit itself but will search for the best deals wherever they can be found in the world.

“There are no geographical restrictions or product restrictions for the Future Generation and Fiscal Stabilisation Fund, and we expect to invest across the full spectrum of products (equities, fixed income, alternative assets, etc.), in accordance with our five year rolling plan, that will provide a superior risk adjusted returns for the future generations of Nigerians,” he said.

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Video: Nigeria’s Sovereign Wealth Fund gets board of directors

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Angola Wealth Fund to announce policies, appoint auditors

By Colin McClelland
Bloomberg News/ December 21, 2012

Angola, Africa’s second-biggest oil producer, will publish the investment policy of its sovereign wealth fund in the first quarter of next year and appoint international auditors, Chairman Armando Manuel said.

The fund, announced on Oct. 17 with $5 billion in assets, will be established by the sale of 100,000 of Angola’s 1.8 million barrel-a-day oil output from companies including Exxon Mobil Corp. (XOM), Chevron Corp. (CVX), BP Plc (BP/) and Total SA. (FP)

It will help the country rebuild from a civil war that ended in 2002 and ease the impact of volatility that prompted a $1.3-billion loan from the International Monetary Fund after crude prices fell in 2008. The IMF predicts the economy will grow by 5 percent next year.

“We are adopting a transparent and robust approach to communications and adhering to internationally accepted institutional governance principles,” Manuel said in an e- mailed statement.

The southwest African country’s credit rating may be upgraded if the fund helps eliminate the quasi-fiscal operations of state-owned Sonangol EP and ensures the oil company’s timely payment of oil revenue to the government, Fitch Ratings Ltd. said Oct. 23. Angola is currently rated BB- by the company.

A charter addressing social challenges and the selection of auditors will be published in the second quarter, followed by updates on large investments, consultants, and remarks from the board every six months beginning in the third quarter, Manuel said. The first audited annual report is due in the first quarter of 2014 and the fund is to be rated using the Linaburg- Maduell Transparency Index, Manuel said.

Advisory Council

Known as the Fundo Soberano de Angola, or FSDEA, the fund will be be managed by a three-member board led by Manuel, an adviser on economic issues to President Jose Eduardo dos Santos. The board has an independent advisory council, which includes the ministers of finance, the economy, and planning, as well as Central Bank Governor Jose de Lima Massano. The council will evaluate the fund’s performance relative to investment policies and benchmarks approved by Dos Santos, Manuel said.

Return on investment and the estimated inflow of $3.5 billion a year in oil revenue will keep the fund replenished, fund documents show. The focus will be weighted more on infrastructure spending — because that’s where Angola’s needs are — than commodity-price stability or long-term investment, according to the papers.

Quantum Global Investment Management AG, a closely held company based in Zug, Switzerland, that has experience in Angola, will run the fund’s day-to-day liquidity, the fund said. Michael Kaimakliotis is Quantum’s head of investments, according to the company website.

President’s Son

The board includes Jose Filomeno de Sousa dos Santos, the eldest son of the president and a former board member of Banco Kwanza Invest SA, where he oversaw an earlier version of the fund.

Also on the board is Hugo Miguel Evora Goncalves, a former senior manager at Standard Bank of Angola, and the Pension and Development Fund of Angola.

The fund will invest in securities and stakes in infrastructure and hospitality projects, domestic agriculture, water, power generation and transportation to attract foreign investment to Angolan infrastructure projects, Manuel said.

Petroleum products account for more than 60 percent of the economy, 97 percent of exports and about 80 percent of state revenue, according to the London-based Economist Intelligence Unit. Angola supplied 18 percent of China’s imported oil in September and 1.6 percent of the U.S.’s in August, according to data compiled by Bloomberg.

Nigeria, Africa’s biggest oil producer, signed its own sovereign wealth fund into law in May 2011 with an initial $1 billion.

http://www.businessweek.com/news/2012-12-21/angola-wealth-fund-to-announce-policies-appoint-auditors
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Angola’s wealth not yet enjoyed by the nation’s population

Video: Locals priced out of Chinese-built Luanda, Angola suburb

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Video: Luanda, Angola suburb- Chinese built ghost city of Kilamba 

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Video: Tour of Luanda’s suburb of Kilamba, Chinese built ghost city


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Dec 21, 2012

Zimbabwe’s $4 billion Sovereign Fund questioned by analysts

By Godfrey Marawanyika
Bloomberg News

Zimbabwean Indigenization Minister Saviour Kasukuwere’s assertion that a sovereign wealth fund created from stakes ceded by foreign-owned companies is worth $4 billion was questioned by economists who said the announcement may be aimed at securing votes ahead of elections.

The fund was created after the government compelled foreign-owned companies to sell 51 percent stakes to Zimbabweans under its indigenization program, Kasukuwere said in an interview on Dec. 18. The size of the fund may increase to $5 billion by mid-2013, after the state forces foreign-owned banks to hand over their controlling shareholdings, he said.

John Robertson, an independent economist, said Kasukuwere’s announcement was “a collection of claims that may never materialize” and was aimed at “impressing” voters ahead of elections scheduled to take place in March.

Zimbabwe, which has the world’s second-biggest platinum and chrome reserves, began implementing a law in 2010 compelling foreign and white-owned companies to cede or sell 51 percent of their shares to black nationals or state-approved agencies. The country, which was under white rule until 1980, this year ordered banks to transfer their stakes to black Zimbabweans by July 2013.

“We are happy with the progress we have made to empower our people,” Kasukuwere said.

Ceded Stakes
Kasukuwere said the sovereign wealth fund comprises shares allocated to communities and workers under share-ownership programs, as well stakes ceded to the National Indigenisation and Economic Empowerment Fund. The $4 billion was calculated by valuing the stakes that have been ceded by foreign-owned companies, he said.

“A lot of what he says is aimed at persuading people they consider to be not very articulate that they will be massively enriched by getting shares of the great wealth being generated by the indigenization process,” Robertson said in a phone interview yesterday. “It is incredibly dishonest, but I don’t think many people have been actually fooled into believing it.”

Kasukuwere is a member of the Zimbabwe African Nation Union-Patriotic Front party headed by President Robert Mugabe, who has ruled the southern African nation since independence. Three years ago, Zanu-PF signed a power-sharing accord with the then-opposition Movement for Democratic Change to end violence that erupted following disputed 2008 elections.

Juice Plan
The MDC has opposed the indigenization program that has been led by Kasukuwere and last month unveiled an economic plan that it said would reverse the effects of the law. The Jobs, Upliftment, Investment, Capital, and Environment plan, known as JUICE, targets economic growth of 8 percent a year and the creation of 1 million new jobs by 2018.

The MDC also rejects constitutional changes proposed by Zanu-PF that include giving the president executive powers to dissolve parliament, appoint judges without them being interviewed and confer presidential immunity.

The announcement of the fund may be an attempt by Zanu-PF to “sabotage” Finance Minister Tendai Biti by showing it’s raising an amount that is about half the size of the country’s $9.9 billion economy, said Chris Mugaga, a senior economist at EcoMeter Global Capital in Harare. Biti is also an MDC member.

“This just buttresses the fact that there are two governments in Zimbabwe,” he said. “Biti is now being relegated to being an MDC minister.”

Compliance
Kasukuwere said most “major foreign-owned mines” have complied with the indigenization law. Last week, Aquarius Platinum Ltd. (AQP) said it will sell 51% of its Zimbabwe mining venture for $550 million. Other mining companies in Zimbabwe include Rio Tinto Group (RIO), Sinosteel Corp., Metallon Corp Ltd. and Impala Platinum Holdings Ltd. (IMP)’s Zimplats Ltd. unit.

An agreement with Zimplats will be completed after officials have addressed “a few numbers which we are finalizing,” Kasukuwere said, without giving further details.

Other companies that have complied with the directive include British American Tobacco Zimbabwe Holdings Ltd. (ZHL) and South Africa’s Pretoria Portland Cement Ltd. (PPC), according to the Indigenization Ministry.

Foreign-owned banks are currently in talks with the government over when they would comply with the ownership laws, Kasukuwere said, without naming them.

Barclays, Standard
Foreign banks that operate units in the southern African nation include the U.K.’s Barclays Plc (BARC), Old Mutual Plc (OML) and Standard Chartered Plc (STAN), Togo’s Ecobank Transnational Inc. (ETI) as well as South Africa’s Standard Bank Group Ltd. (SBK) and Nedbank Group Ltd. (NED) Barclays Bank of Zimbabwe Ltd. is the largest lender on the Zimbabwe Stock Exchange, with a market capitalization of $56 million.

The laws on foreign-bank ownership may stifle economic growth by harming investor confidence, central bank Governor Gideon Gono said in July. The country’s banking industry is the riskiest in sub-Saharan Africa, according to an Economic Intelligence Unit survey published in September.

Kasukuwere has yet to deliver a report to the Cabinet about the fund, said Economic Planning Minister Tapiwa Mashakada, who is an MDC member.

“We as Cabinet don’t know about that money, it has yet to be presented to us,” Mashakada said in an interview on Dec. 19. “Maybe it’s just a Zanu-PF thing. They know better about that money than the rest of Cabinet.”

http://www.bloomberg.com/news/2012-12-21/zimbabwe-s-4-billion-sovereign-fund-questioned-by-economists.html
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Norway wealth fund eyes more Africa exposure

By Tosin Sulaiman | Reuters – Wed, Dec 19, 2012

JOHANNESBURG (Reuters) – Norway’s $680 billion sovereign wealth fund is looking at Africa with interest as it seeks to take advantage of the region’s rapid growth and diversify its portfolio, a senior official said on Wednesday.

The world’s largest sovereign fund has investments in Egypt, South Africa and Morocco but sees opportunities in other African countries, though their capital markets are still developing, Deputy Chief Executive Trond Grande told Reuters.

“Other African nations are improving their capital markets. You see that growth is high there,” Grande said. “They are of interest for this fund as well, as we’re trying to be as globally diversified as possible.”

The fund, which manages Norway’s surplus oil revenue and holds $136,000 for each of its five million citizens, has been reducing its investments in Europe while increasing its exposure to emerging markets.

In March the Norwegian government said that the share of European investments in the fund’s portfolio would be reduced over time to 41 percent from 54 percent, while Asia-Pacific’s share would rise to 19 percent from 11 percent.

The share of emerging markets is set to increase to 10 percent from 6 percent. Africa is not given a distinct allocation.

Grande declined to name specific countries but said the criteria for selection included the size of economies and market sophistication. This suggests that Nigeria, Africa’s most populous nation and biggest oil producer, would be in the picture.

NATURAL CANDIDATES
“Typically, the markets with a certain level of developed capital market infrastructure (would be selected), a certain level of size because this is a large fund,” Grande said. “That typically means the larger economies, the more populous nations.”

Grande said he would not rule out allocations to additional African countries in the next two to three years.

“If they keep developing the way they have, then they’re natural candidates for inclusion in our portfolio,” he said.

Sub-Saharan Africa is home to some of the world’s fastest-growing economies, with countries such as Mozambique, Kenya and Ghana attracting significant foreign investment after oil and gas finds.

The International Monetary Fund projects growth of 5 percent in the region this year and next.

Norway’s oil fund had 57 equity investments worth $1.6 billion in South Africa, the continent’s biggest economy, at the end of last year. The investments spanned the mining, telecoms, consumer goods and banking sectors.

Holdings included AngloGold Ashanti, telecoms group MTN, media company Naspers and Standard Bank Group, Africa’s biggest bank by assets.

Its South African fixed-income exposure was $170 million, predominantly in government bonds.

The fund held 1.1 percent of the world’s listed equities and 0.6 percent of global bonds at the end of 2011.

In the third quarter of this year the fund’s investments grew 4.7 percent on the back of a global stock market rally, compared with a second-quarter loss of 2.2 percent.

The fund also cut its holdings of French and Spanish government debt and increased its exposure to South Korean, Mexican and Russian government bonds.

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Video: Africa For Norway-Viral video pokes fun at stereotypes in Africa aid efforts

NPR: A group of South African students and an aid agency in Norway are challenging the stereotypical image of Africa as a continent riddled with conflict, disease, corruption, poverty, and brutal dictatorships needing rescue from developed nations.
And they’re doing it with humor and a video parody of Live Aid that’s gone viral. The group turned the tables by producing a fictional Christmas appeal video that portrays Norway as a bitterly cold country full of freezing people in need.

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India, Russia sign pacts to boost investments

Russian sovereign wealth fund Russian Direct Investment Fund (RDIF) on Monday signed a pact with State Bank of India (SBI) for setting up a $2 billion investment consortium for promoting investments between the two nations.

Russia India

Ashwini Phadnis
The Hindu

India and Russia on Monday signed a memorandum of understanding (MoU) to promote direct investment. The MoU envisages investments up to $2 billion in important bilateral projects or companies, privatisation and other opportunities.

The agreement was among the 10 that were signed at the 13th annual India-Russia summit. The Indian side was led by Prime Minister Manmohan Singh while the Russian delegation was led by the visiting President Vladimir V. Putin.

In his address, the Prime Minister said that Russia’s deeper integration into the global economy by joining the World Trade Organisation would present more opportunities for the business communities in India and Russia.

“Our bilateral trade has grown by over 30 per cent this year. There is still untapped potential in areas such as pharmaceuticals, fertilisers, mining, steel, information technology, civil aviation, telecommunications, infrastructure, food processing, innovation and services, which we will work to exploit,” Singh said at the 13th Annual India-Russia Annual Summit meeting, which was held here on Monday.

The Prime Minister added that the two countries have asked their inter-Governmental and business-level groups to recommend specific steps for enhancing bilateral trade and investment flows.

Ties in oil, gas sectors
At the meeting, India also conveyed its interest in deepening co-operation in the oil and natural gas sectors with Russia, including through mutual investments and joint projects in third countries.

Pointing out that development of India’s nuclear energy programme had been a key pillar of the strategic partnership with Russia, Singh said that the construction of Unit 1 of the Kudankulam Nuclear Power Project was now complete, and power generation would commence shortly.

“Negotiations for the construction of Units 3 and 4 at Kudankulam have made good progress. We intend to continue implementing the roadmap for co-operation in the nuclear energy sector that was signed during President Putin’s visit in 2010 as the then Prime Minister of Russia,” Singh said.

He said India and Russia undertook an extensive review of the multi-faceted bilateral co-operation, especially in energy, defence, space, trade and investment, science and technology, education, culture and tourism.

Helicopter deal
India and Russia also signed a contract for 71 Mi-17V-5 helicopters up from 59 helicopters signed in February 2010.

In addition, a contract for licence production of an additional 42 SU aircraft was also inked. Bharat Sanchar Nigam Ltd also signed a MoU with NIS-GLONASS for conducting through pilot projects for providing satellite-based navigation services.

Russia India
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Video: Russia’s new Sovereign Wealth Fund 

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China’s sovereign wealth fund bids on U.K. Blackstone office campus in London

By MarketWatch/The Wall Street Journal

December 23, 2012

China’s sovereign wealth fund is among a trio of Asian investors vying to buy an 800-million-pound ($1.29 billion) London office campus from Blackstone Group LP in what would be the U.K.’s highest-value property deal since the start of the financial crisis, the Financial Times reported Sunday on its website.

China Investment Corp. and government-backed funds from South Korea and Malaysia have put forth bids for Chiswick Park, Blackstone’s 1.1-million-square-foot development, the FT reported, citing unnamed people familiar with the process.

The U.S. private equity group bought the property from a consortium of Aberdeen Asset Management, Schroders and Stanhope at the start of 2011 for GBP480 million, the FT said

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Video: Sovereign Wealth Funds explained

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Video: Emergence of Sovereign Wealth Funds/The Basics -The Australasian Finance and Banking Conference

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Video: Sovereign Wealth Funds Discussion

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Video: James Wolfensohn, former President of the World Bank, presents his Keynote Address “What Sovereign Wealth Funds Can Do to Help Alleviate Global Poverty”- October 4, 2010

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One Comment on “Sovereign Wealth Funds- Africa, Asia and Europe”

  1. Antonio Mcinroy Says:

    We are where we are because of our own thinking process.

    AndOf course yes we all will remain where we are right up until we
    all embrace carrying out problems another way given that when all
    of us continue engaging in things much the same way, we shall just become stagnant

    Reply

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