Sovereigns shape up for differentiation
Albert Essien has brought much-needed calm to the bank
Tuesday, September 11, 2012
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by Dominic O’Neill, Kanika Saigal
Under the plans, the finance ministry is to transfer the
management of $150 billion-worth of investment funds in
Russias Reserve Fund and the National Welfare Fund from
the central bank to the FFA.
Siluanov believes the FFA will start operating fully early
This agency will be staffed with top-notch managers,
experienced in financial markets, says Siluanov. It
will be for them to determine the most effective way to invest
the funds held by our Reserve and Welfare Funds in the most
effective fashion, be it domestically or on the international
A proportion of the FFAs investable funds will be
invested in assets such as equities and corporate bonds for the
first time, increasing diversification and marking an evolution
in strategy beyond a traditional focus on foreign sovereign
bonds, particularly US Treasury bills.
The range of instruments the fund can be invested in
will be substantially enlarged in scope to get higher revenues
from these investments, while at the same time retaining
sufficient stability of those investments, says
Although the exact amount is yet to be finalized, Siluanov
believes between 15% and 20% of the FFAs funds could be
invested in shares. He adds the agency will not be restricted
to buying shares in state-owned banks Sberbank or VTB.
The managers for the FFA will be guided by
considerations of profitability and risk, says Siluanov.
It will be up to the managers of the agency to make
investment decisions. If they come to the conclusion that such
an investment will be profitable, why not?
See the September issue of Euromoney for more news on Russia's
sovereign wealth fund.
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