About the FSDEA
Why was the FSDEA established?Open or Close
On 20 November 2008, Angola’s President, José Eduardo dos Santos, announced the establishment of a special commission to build the foundations for a new sovereign wealth fund (SWF) to promote growth, prosperity and social and economic development across Angola. In 2011 the Fund was legally ratified, and officially established as the Fundo Soberano de Angola in 2012 with an initial endowment of USD 5 billion.
How is the Fund different from other Sovereign Wealth Funds in the region?Open or Close
Since its launch in October 2012, FSDEA devoted a considerable amount of time assessing international best practices for its governance structure, investment strategy and risk management rules. Ultimately, the FSDEA commits to surpassing the compliance benchmark set by other SWFs in the region. Before debuting its investments, the Board of FSDEA cooperated with the Angolan Government to observe past practices deployed by other SWFs and current trends in the industry in its official regulatory documents. The board of directors also consulted supranational organizations, such as the IMF, the World Bank, Moody’s and more seasoned SWFs, in order to produce the governance statues, investment policy and management rules that were approved by the Angolan Government and issued on the National Gazette of Angola, which are available for public research. Moving forward, we will continually measure our activities to ensure they positively impact the lives of the Angolan people.
Who leads the Fund?Open or Close
The Fund is administered by a three-member Board of Directors. A Fiscal Committee oversees the compliance of the actions of the Board of Directors with the relevant regulations. The Fund also has an Advisory Council, composed by the Minister of Finance, the Minister of Economy, the Minister of Planning and the Governor of the National Bank of Angola, who reports to the President on the alignment of the Funds activities to the macroeconomic programs of the Government.
Who benefits from the returns?Open or Close
The FSDEA is an investment institution fully owned by the State of the Republic of Angola, which pursues long-term sustainable financial returns that will positively impact the lives of the people of Angola today and in the future. The Fund plays an important role in promoting social and economic development, as well as generating wealth for everyday Angolans. The creation of the FSDEA isn’t simply about wealth creation – it’s about supporting basic things such as access to clean water or the rebuilding of roads that help children to get to school. These are all measures that the Fund will be supporting and investing in – in order to really make a positive impact on the lives of the Angolan people.
Is FSDEA a private company or a government body?Open or Close
The FSDEA is not a private company. It is a government agency, operating as a Sovereign Wealth Fund, which is fully owned by the State of the Republic of Angola. Under the Fund’s bylaws, regulated by Presidential Decree 48/11 of 09/03/2011 (which is publicly disclosed and available on the FSDEA website), the FSDEA is an autonomous State agency, managed by a Board of Directors, which is supervised by a Fiscal Committee and an Advisory Board. The Parliament will assess the Fund’s results on a regular basis.
What is its association with the Government? Is the President of the Republic of Angola involved in the Fund’s decisions?Open or Close
The President of the Republic of Angola appoints the Board of Directors, approves the Fund’s investment policy, reviews its regulations and managerial procedures, and appoints the independent auditor of its annual financial accounts. An Advisory Council, composed by the Minister of Finance, the Minister of Economy, the Minister of Planning and the Governor of the National Bank of Angola, reports to the President on the alignment of the FSDEA’s activities to the macroeconomic programs of the Government.
Is the FSDEA considered a stabilization fund?Open or Close
The FSDEA is not a fiscal stabilization fund. The Government of Angola directly manages three funds for fiscal stabilization purposes, which are under the custody of Central Bank of Angola. These funds are referred to as the Oil Price Differential Account, the Revenues Account for Bonus from Oil Concessions and the Strategic Financial Oil Reserve Account for Infrastructure.
Additionally, the Ministry of Finance may withdraw funds from the FSDEA in periods of severe economic distress, with an express authorization from the Government. For this purpose, the FSDEA’s investment portfolio must have a minimum allocation of 20% of liquid assets investments at all times, which may be withdrawn by the Ministry of Finance at short notice. The Fund’s investment regulations further require that 95% of the portfolio holdings are uncorrelated to oil price volatility.
What is the ultimate objective of the Fund?Open or Close
As it is the case for most sovereign wealth funds, the ultimate goal of Fundo Soberano de Angola is to generate financial returns for its country of origin. Therefore, its investment portfolio bears a selective set of assets that are expected to earn cash revenues, capital gains or both within a predefined timeframe. As opposed to private financial institutions, the investment strategy of sovereign wealth funds bear additional requirements from its countries of origin, which may be fiscal stability support, intergenerational wealth transfer or developmental support. These supplementary objectives are pursued in an exclusive or comingled manner by sovereign wealth funds within the scope of their investment policy.