Angola Sovereign Fund barred from granting loans or providing guarantees

24 July 2019

The Angolan Sovereign Fund is prevented from directly or indirectly granting loans or providing guarantees in connection with the placement of assets under the investment policy for the 2019/2023 term, approved by Presidential Decree, the Angop news agency reported.

The Presidential Decree that introduces changes in the management of the Sovereign Fund was published in Angola’s official bulletin, Diário da República, on 15 July, and the Fund may, under duly justified circumstances considered by the Board of Directors, use leverage mechanisms to make investments of up to 5.00% of the fund’s capital.

“Because the Fund’s primary source of funding is the oil sector, investments related to the sector should not exceed 5.00% of assets under management,” said the Presidential Decree.

The investment of assets, and therefore the investment portfolio, must be a minimum of 20% and a maximum of 50% in fixed income assets issued by supranational agencies or institutions of countries, mainly G7 or other economies, Investment grade-rated companies and financial institutions issued by one of the top five credit rating agencies.

The decree also sets a maximum of 50% of the capital invested in equity securities, including stock market shares in advanced economies, emerging market assets as well as frontier economies and also sets a maximum percentage of 50% of capital in alternative investments.

Hiring external managers is now governed by criteria of competence, reliability, credibility, honesty, reputation and proven experience in the area, and another requirement to be able to perform this activity in accordance with the laws of the country in which it was incorporated and to have more than 10 years of experience in at least one G7 country.

Additional requirements include being subject to the supervision of a regulatory body for the business to be conducted, not being the subject of a criminal investigation and management of a financial portfolio with an asset value of no less than US$3 billion.

The board of the Fund chaired by José Filomeno dos Santos was dismissed on 11 January 2018, and was replaced by another one led by Carlos Alberto Lopes. (Macauhub)