Angola’s $5 Billion Fund to Focus on Cash Investments, Hotels

from BloombergBusinessWeek..

June 21, 2013

By Henrique Almeida

Angola’s $5 billion sovereign wealth fund will put half of its investments in fixed-income instruments and cash and the rest in alternative ventures including hotels, according to an investment policy.

Jose Filomeno dos Santos, a son of President Jose Eduardo dos Santos, was appointed chairman of the board of directors of the fund known as Fundo Soberano de Angola, or FSDEA, according to a statement posted on its website.

Angola, Africa’s second-biggest oil producer after Nigeria, said last year it was establishing the fund to help the country rebuild from a civil war that ended in 2002 and diversify revenue sources after a slump in crude oil prices forced the country to borrow $1.3 billion from the International Monetary Fund in 2008.

Part of the investments will be in “fixed-income instruments and cash issued by sovereign agencies, supranational institutions, large companies with investment-grade credit ratings, financial institutions and additionally, in equities issued within the G-7,” the fund said in the statement.

The rest will be put in “alternative investments,” including commodities, agriculture, mining, infrastructure and property as well as Brazilian, Russian, Indian, Chinese, South African and frontier-market stocks, assets and “depreciated opportunities,” it said.

FSDEA will first establish a fund to focus on hotels, it said. A tender has been issued to hotel operators to develop and operate a portfolio of three- to five-star hotels across sub-Saharan Africa.

The IMF promoted setting up the fund and cutting the quasi-fiscal operations of the state oil company, Sonangol.

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