Presidential Decree 216/24, of 21 October 2024, approved the Investment Policy of the Angolan Sovereign Fund (Fundo Soberano de Angola, FSDEA). This article provides a summary.
Objectives
The main objectives of the FSDEA are the following:
- Save and transfer wealth to future generations of Angolans;
- Maximize financial returns;
- Manage resources allocated by the state for specific purposes, such as fiscal stability and development of national infrastructure projects.
Investment Principles
The FSDEA shall achieve financial returns while protecting its capital, and its investments shall be aimed at:
- Increasing national wealth through prudent investments based on the best risk/reward balance;
- Creating additional sources of income to Angola and ensure the wealth transfer between generations.
Independence
The FSDEA is totally independent from the state administration and bodies.
Asset Allocation
The FSDSE investment portfolio shall be allocated as follows:
- Between a minimum of 20% and a maximum of 50% will be invested in fixed income securities issued by sovereign entities of predominantly G7 countries, or companies or financial institutions with investment grade rating;
- A maximum of 50% will be invested in variable income securities;
- A maximum of 50% for alternative investments.
Petroleum investments
Investments in petroleum assets shall not exceed 5% of the fund's assets.
Alternative investments
The fund may invest in alternative investments, including private equity and venture capital.
Hedging
The fund may use hedging instruments, including derivatives, to hedge the risk of its investments.
Leverage
In special cases, the fund may use leverage for its investments up to a maximum of 5% of the fund's capital.
Reinvestment
Investment returns shall be used primarily for reinvestment. They may also be used for development and social responsibility projects.
Currency
Investments shall be made primarily in US Dollars, although investments in other currencies are also possible.
Risk Management
The Board of Directors of the fund shall approve a Risk Management Policy.
Asset Managers
The fund may hire external asset managers who meet the following requirements:
- More than 10 years' experience in at least one G7 economy;
- Subject to the authority of a regulatory body;
- Not targeted in any criminal investigation;
- With assets under management of at least USD 3 billion.
The same asset manager cannot manage more than 30% of the fund's global portfolio.
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