London - Angola's fledgling sovereign wealth fund has identified direct investments in sub-Saharan Africa, and is poised to start deploying up to a third of the $5 billion (R54 billion) it has been endowed by the government, its chairman said.
Jose Filomeno dos Santos said the fund had set up a series of special purpose vehicles to identify opportunities in commercial infrastructure, energy, mining, agriculture and real estate.
He was speaking to Reuters in London as the Fundo Soberano de Angola (FSDEA), set up in 2012 to invest Angola's oil wealth, announced it now has assets of $5 billion following a final top-up of $1.35 billion made in June.
The fund will also deploy another third of its endowments, around $1.66 billion, to “opportunistic” investments around the world, seeking to buy up companies with a focus on sectors that could complement its activities in Angola and elsewhere in Africa.
“This is interesting for a fund such as ours because we have a need to attract talent and a need to bring technology to the (African) continent,” he said.
Such targets might include “companies that maybe are based in saturated markets in Europe and the United States that could be refocused to investing in our region of the world,” he said.
Another third of the fund's assets are being deployed to liquid financial assets - fixed income and equities - in developed markets, though dos Santos did not disclose what those investments were.
According to audited results for 2013 released on Wednesday, the fund had total assets of around $3.65 billion prior to the final top-up, and allocated $24 million to set-up costs during the year.
Dos Santos said future endowments to the fund would depend on how much was left over from a specific government account fed by oil cash worth roughly $3.65 billion a year aimed at financing fiscal stability measures.
The remainder will be transferred to the fund.
“We would hope that at least half of that figure would be transferred to us, but it is really what is available,” he said.
Dos Santos, the eldest son of long-serving President Jose Eduardo dos Santos, declined to identify specific acquisition targets being eyed by the fund or the vehicles it has set up, saying that was commercially sensitive information.
However, the fund has signed up to an IMF-backed set of guidelines on best practice and transparency for sovereign wealth funds and investments will be disclosed after they have been made, he said.
NO INVOLVEMENT IN BESA
Dos Santos said he was approaching the final year of a three-year term as the head of the fund but had no plans to enter politics in Angola, Africa's biggest oil producer after Nigeria, and hoped to remain in finance, either with the fund or in a similar role.
He also said the fund had not been involved in Luanda's intervention in the Angolan unit of troubled Portuguese lender Banco Espirito Santo.
Angola put the local unit into administration in August as part of a series of “extraordinary overhaul measures” following Portugal's announcement of a 4.9 billion euros rescue plan for the parent company.
Shareholders and investors in Banco Espirito Santo and the owner-family's other companies have lost more than 10 billion euros, making this one of Europe's biggest corporate collapses ever.
Banco Espirito Santo Angola (BESA) is a major financial player in Angola, with close ties to the ruling elite.
“We have not been involved,” said dos Santos.
As most of FSDEA's funds have not yet been invested, they are being kept at one of the 10 large global custodian banks, he said. He did not disclose the name of the custodian, but a source close to the fund said it was Northern Trust. - Reuters