Fundo Soberano De Angola announces audited results for 2015

José Filomeno de Sousa dos Santos 600x400

José Filomeno dos Santos

PRESS OFFICE: Djembe Communication

Today, Fundo Soberano de Angola (FSDEA), Angola’s sovereign wealth fund, announced its audited results for 2015, reflecting its fiscal position and investment activity for the year. Deloitte & Touche independently audited the FSDEA’s financial statements for the third consecutive year.

The FSDEA was also authorized by the Angolan Ministry of Finance to begin the adoption of International Financial Reporting Standards (IFRS) for the first time since its inception. Currently, the FSDEA is undergoing a transition period of two-years, which started in 2015 that will lead to the full conversion of its book keeping from the National Accounting Standards for Financial Institutions (CONTIF) to the IFRS. The 2015 audited results are already compliant with the IFRS.

José Filomeno dos Santos, Chairman of the Board of Directors, FSDEA, stated: “The recent transition from CONTIF to IFRS showcases FSDEA’s operational and investment activity in more detail than ever before and evidences the progress made in terms of internal governance during the three years that followed the start of our activities. FSDEA is the first financial institution in Angola to present independently audited financial statements in compliance with IFRS.”

The latest financial statements of FSDEA show total assets of US$4.75bn as of December 31, 2015. Whilst Angola’s sovereign wealth fund is set to reach profitability by the end 2017, highlights of the investment portfolio of FSDEA at the end of the 2015 are as follows:

  • The Fixed Income Assets were valued at $1.20bn, representing 25% of the total portfolio;
  • The Variable Income Assets were valued at $620m, representing 14% of the total portfolio;
  • $407m of the portfolio’s $2.7bn allocation to private equity is already invested in assets based in Angola and the wider sub-Saharan Africa region;
  • 62% of the total portfolio is dedicated to assets in Sub-Saharan Africa, 21% in North America, 11% in Europe, and 6% in the rest of the world;
  • No additional capital was paid-in to the FSDEA by the Government in 2015;

“We continue to make sizeable allocations across the Angolan and wider sub-Saharan region through FSDEA’s private equity vehicles. Meanwhile, the investor community continues to observe Africa with interest, as the continent displays urbanization and positive demographic growth rates that can support enormous consumption growth across various sectors in the future. FSDEA’s investments in infrastructure, real estate, timber, agriculture, healthcare, mining and mezzanine finance are aligned with its strategy to tap into the growing demand for the expansion of these fields in the region.”

During 2015 FSDEA’s private equity investment activity, focused exclusively on Angola and sub-Saharan Africa, was as follows:

  • Infrastructure Private Equity Investment Fund – 19% of the $1.1bn paid-in capital was allocated to projects in Angola and Kenya;
  • Hotel Private Equity Investment Fund – 23% of the $500m paid-in capital was allocated to investments in Angola and Zambia;
  • Mining Private Equity Investment Fund – 2% of the $250m paid-in capital was allocated to a mining venture in Mauritania;
  • Timber Private Equity Investment Fund – 10% of the $225m paid-in capital was allocated to a large-scale eucalyptus concession in Angola
  • Mezzanine Finance Private Equity Investment Fund – 12% of the $200m paid-in capital was allocated to an asset in South Africa.

Additionally, in the first half of 2016, the $250m Agriculture Private Equity Investment Fund secured concessions of seven large-scale farms in Angola, which are currently under financial appraisal. Altogether, these comprise approximately 72.000 Ha of agriculture farmland dedicated to grains/oil-seeds and rice.

Commenting on the market outlook and FSDEA’s strategy for 2017, dos Santos concluded, “Financial market volatility is expected to remain the only constant during the coming year. FSDEA will maintain its portfolio diversified to the extent that it bears more assets that remain shielded from such uncertainty. Our emphasis will rest on key large scale domestic projects, internal cost reduction and in-house capacity building. Our team will benefit from more extensive training programms that ensure full in-house access to the industry level know-how, which we currently hire. In the coming years, FSDEA shall move towards the management of its operations and investments in a more autonomous, cost effective and skillful manner.”

Angola’s sovereign wealth fund also dedicates up to 7.5% of its capital to social development programmes that are vital for the socioeconomic support of many Angolan citizens. FSDEA’s Social Charter supports the work of various NGOs in the fields of vocational training, sustainable income generation, access to water and healthcare services. It currently dedicates $156 million to 16 projects across 10 of Angola’s 18 provinces. This effort has been crucial for the work of institutions such as World Vision, People in Need, Medici Con L’Africa, Globethics, African Innovation Foundation and many others in remote and peri-urban areas of Angola.

FSDEA also announced that Augusto Archer Mangueira was recently appointed to the role of Minister of Finance, whereas Mr Valter Filipe Duarte has been appointed to the position of Governor of the Central Bank of Angola. As a consequence, both of these officials became members of FSDEA’s Advisory Board. The latter is a fundamental body of Angola’s sovereign wealth fund that comprises the heads of the main institutions responsible for the macroeconomic management of the country. FSDEA’s Advisory Board supports the President in all policy and regulatory decisions regarding FSDEA.

Lastly, Miguel Damião Gago was appointed to the Board of Directors for the FSDEA, following the departure of Artur Carlos Andrade Fortunato, who has recently been appointed as Minister of Construction of Angola.

About the Fundo Soberano de Angola

The Fundo Soberano de Angola (FSDEA) is a sovereign wealth fund wholly owned by the Republic of Angola. The Fund, established according to international governance benchmarks, will gradually diversify its investment portfolio across a number of industries and asset classes in accordance with its investment policy and guidelines. By pursuing investments that generate long-term and socially-enhancing financial returns, the FSDEA will play an important role in promoting Angola’s social and economic development and generating wealth for its people.

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