Investment Strategy

The Fundo Soberano de Angola’s investment strategy is founded on its commitment to Angola’s social and economic development. While the FSDEA considers investing across Africa and globally, it has a strong focus on investments in the domestic market, building Angola’s infrastructure and creating opportunities for the citizens of Angola. By taking a long-term view with its investments, the FSDEA aims to achieve sustainable and stable returns as well as to play a critical role in the development of Angola’s human capital that is required to build the economic foundations, which are an essential prerequisite to improve the living standards of all Angolans.

The Fund’s asset allocation envisions a portfolio that pursues the optimization of the expected returns versus the expected risk, over a long-term investment horizon. As stated in the Fund’s investment policy, over the medium to long-term, the FSDEA intends to allocate approximately one third of its initial endowment to interest bearing assets such as sovereign and corporate bonds, mortgage backed, high yield and emerging debt as well as high quality currencies. The other third will be allocated to various investment vehicles and sectors in mainly in emerging and frontier markets. This will also include alternative investments, predominantly in sectors such as agriculture, mining, infrastructure and real estate – particularly hospitality – in Angola and across other African markets to nurture sustainable domestic and regional growth.

The Fund is initially focused on investing in the sub-Saharan hospitality sector, through the establishment of a dedicated Hotel Fund. The rationale behind creating this fund is that the sector holds substantial potential for job and wealth creation and stimulates a local supply chain that positively impacts the overall economic growth of the region’s local economies. Additionally, the FSDEA will seek investments in infrastructure projects across Sub-Saharan Africa, through a Fund vehicle, to support Sub-Saharan Africa’s economic development and benefit from the strong growth of the region, as an investor.

The Fund has also developed clear and strong long-term positioning that stretches beyond a short-term economic profit maximisation strategy, by allocating up to 7.5% of its endowment to social development and socially responsible projects in the areas of education, income generation and off-the-grid access to clean water, healthcare and energy. Through this approach the Fund aims to realize potential that would be overlooked, otherwise, due to a lack of investment. For instance, by allocating a portion of its funds to increase of human capital the Fund will expand Angola’s capacity to develop faster and secure additional investments.

FSDEA Nurturing Our Future

Portfolio

The Fund has invested in the sub-Saharan hospitality sector, through the establishment of a dedicated Hotel Fund for Africa worth $500 million. The hospitality sector holds substantial potential for job and wealth creation in Angola, whilst also stimulating a local supply chain that positively impacts the overall economic growth of the region’s local economies.
Download Fact Sheet – FSDEA Hotel Fund

Additionally, the FSDEA has also created a $1.1 billion dedicated infrastructure fund that focuses on equity investments in energy, transport and large industrial developments domestically and across the sub-Saharan African region.
Download Fact Sheet – FSDEA Infrastructure Fund

Investment Funds: The Fund also launched five new dedicated investment funds with initial investment values totaling USD $1.4 billion over the next three- to-five years. These funds are dedicated to making private equity investments in mining, timber, agriculture, healthcare, and promoting regional growth by developing a portfolio of assets balancing yields through a separate mezzanine fund.

With Africa’s vast mineral deposits offering significant potential for mining companies, the FSDEA’s Mining Venture Capital Investment Fund will invest USD $250 million in mining over the next three-to-five years. With a focus on Sub-Saharan Africa, and in particular Angola which itself has one of the richest subsoil in the region, investments will be considered across the entire project development curve from exploration to upgrading and expansion.
Download Fact Sheet – FSDEA Mining Venture Capital Investment Fund

The FSDEA’s Timber Venture Capital Investment Fund will invest USD $250 million in timber investments over the next three-to-five years. Timberland investments are core to promoting rural economic and social development by bringing much needed stability and jobs into underserved rural communities. Forestry projects are also a strong foundation for rural communities’ transformation into resilient and prosperous communities.
Download Fact Sheet – FSDEA Timber Venture Capital Investment Fund

Agriculture and related agri-business represents Sub-Saharan Africa’s key industry, employing the largest percentage of the workforce and accounting for almost half of regional GDP. Returns from African farming can be greatly enhanced through investment and implementation of modern farming techniques. The FSDEA’s Agriculture Venture Capital Investment Fund has allocated USD $250 million to the agricultural sector, capitalizing on this high growth sector whilst ultimately supporting social objectives such as employment and food security.
Download Fact Sheet – FSDEA Agriculture Venture Capital Investment Fund

Investment in the healthcare sector is fundamental to the growth and sustainability of the African continent. Accordingly, the FSDEA’s Healthcare Venture Capital Investment Fund is set to invest USD $400 million over the next three-to-five years with an investment horizon of more than 10 years. The Fund will focus on African countries with the highest return potential and favorable government support for healthcare including Angola, Cameroon, Ghana, Kenya, Mozambique, Nigeria and South Africa.
Download Fact Sheet – FSDEA Healthcare Venture Capital Investment Fund

Finally, the FSDEA’s Mezzanine Venture Captital Investment Fund, worth USD $250 million, will explore investment opportunities for early stage, expansion and exit including Greenfield and Brownfield investments. The Fund will be aiming to make these investments over the next three-to-five years.
Download Fact Sheet – FSDEA Mezzanine Venture Captital Investment Fund

Also supporting Angolan entrepreneurs is the newly created commercial entity that will target domestic micro-business ventures and coach them from business strategy to commercial success. This initiative targets Angolan entrepreneurs in the informal sectors that usually do not have access to this support and investment. This undertaking represents the first social integration project in Angola that is carried out as a sustainable commercial venture.

Decrees and Regulations

The following Presidential Decrees and Regulation relating to the Fundo Soberano de Angola (FSDEA) provide additional insight on the FSDEA’s legal framework, its governance and investment structure

Risk Management

The assessment and management of risk is essential to the Fundo Soberano de Angola’s investment strategy. In the development of risk management protocols, the Fundo Soberano de Angola has applied international best practices to govern all investment activities.

The Fundo Soberano de Angola has established measures, committees and procedures that support the monitoring and managing of potential risk issues. Executive roles include:

  • Fiscal Council
  • Risk Management Committee
  • Chief Risk Officer
  • Chief Compliance Officer
  • External Asset Managers

Quarterly Investment Updates

The FSDEA Quarterly Investment Reports provide an overview and update on the quarterly investments of the Fund along with the performance of the Fund’s investment activities, including returns, geographic and sector specific allocation.

2014
Q1 – To download the Investment Report please click here.
Q2 – To download the Investment Report please click here.
Q3 – To download the Investment Report please click here.
Q4 – To download the Investment Report please click here.

2015
Q1 – To download the Investment Report please click here.
Q2 – To download the Investment Report please click here.

The reporting of the Fund’s quarterly investment activities is part of our commitment to good governance and transparency along with keeping our stakeholders up to date with the Fund’s investment activities.