Saturday, September 15, 2012

15/9/2012: Russia to revamp SWF structure




According to the report in the Euromoney ( http://www.euromoney.com/Article/3087655/Category/4298/ChannelPage/0/Russias-new-SWF-seeks-bond-and-equity-exposure.html?copyrightInfo=true) Russia will launch a new state-owned investment agency in 2013 "to invest the country’s oil wealth in global financial markets, finance minister Anton Siluanov tells Euromoney in an exclusive interview."

The new Federal Financial Agency (FFA) will have investment mandate to cover "a more diverse range of domestic and international securities, including bonds and equities for the first time, under an investment strategy similar in part to that employed by the Norwegian sovereign wealth fund (SWF)". Anton Siluyanov, Russian finance minister said the FFA "will be managed by investment professionals and will be free from government intervention".

The fund will have under management assets of $150 billion-worth of investment funds in Russia’s existent Reserve Fund and the National Welfare Fund. These are currently managed from the Central Bank.

The net positive here is that the fund will be free to invest in domestic non-state owned enterprises - a significant opportunity for deepening Russian capital markets. It also can provide some new support for corporate debt issuance inside Russia. To-date Russian SWFs were primarily invested in foreign sovereign bonds. New allocation, according to Siluyanov, can be closer to 15%-20% equities.

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