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Azerbaijan to minimize part of asset portfolio managed by foreign managers

17 February 2009 15:46 (UTC +04:00)

Baku. Vugar Israfilov - APA-Economics. The State Oil Company of Azerbaijan (SOFAZ) has made its mind up to minimize the 8% part of the portfolio managed by foreign asset managers.
Shakhmar Movsumov, head of the oil fund, earlier said Azerbaijan was unhappy about returns on part of the portfolio managed by foreign asset managers.
According to him, average annual return on foreign assets is 4% while return on the assets managed by foreign managers is close to 0% because of foreign management costs.
SOFAZ believes the managers did not pay enough attention to portfolio diversification, and they need to come up with a long-term asset management strategy.
As a result, average annual return on total assets management dropped to 3.79%.
He said earlier the crisis has increased the possibility of investing part of the oil fund in cheap shares in foreign companies.
However, SOFAZ doesnâ€™t want to kick out the foreign manager now amid the global financial crisis.
SOFAZ holds half of the assets in the US dollar and another half in the euro.
The Fund is expected to receive about $13 billion in 2009 if the price of oil stays at $50 a barrel.