BAKU, Azerbaijan, January 21. The State Oil Fund of Azerbaijan (SOFAZ) has formalized its intent for long-term strategic cooperation with BlackRock, one of the largest asset management companies in the world, and its subsidiary, Global Infrastructure Partners (GIP), in Davos. The collaboration aims not only to provide access to global infrastructure funds but also to create investment opportunities in infrastructure projects in Azerbaijan and related to Azerbaijan.
What new perspectives will arise from considering investment opportunities in infrastructure assets related to Azerbaijan?
Economist expert Khalid Karimli told Trend that BlackRock is the world's largest asset management company. It's the number one fund globally in terms of the size of its portfolio and investment opportunities. GIP is its partner for infrastructure.
"SOFAZ itself manages assets, while BlackRock, in contrast, raises capital from investors and allocates these funds across a diverse range of assets. The State Oil Fund primarily invests the nation's oil and gas revenues.
Recently, a memorandum of intent was signed between the two entities, marking the beginning of a long-term strategic partnership. Notably, this memorandum does not establish any binding legal obligations for either party but serves as a preliminary framework outlining the contours of their future collaboration."
The expert emphasized two key points of significance in this development. First, this marks the commencement of SOFAZ’s partnership with the world’s largest asset management firm, BlackRock. This collaboration opens up avenues for SOFAZ to actively engage in projects led by BlackRock.
"Of particular note is the potential for SOFAZ to invest in global infrastructure projects managed by Global Infrastructure Partners (GIP), a subsidiary of BlackRock. Essentially, through GIP, SOFAZ aims to secure stakes in projects where BlackRock is already involved. It appears that the fund has strategically chosen to allocate a portion of its portfolio to infrastructure projects, which is a prudent decision," the expert observed.
According to the expert, the interest rate levels, the expected profitability, and how the investments will be assessed later are separate matters.
"However, having infrastructure projects in the investment portfolio is strategically the right approach. SOFAZ is beginning its cooperation in this direction.
The second point is the issue of attracting these investments to Azerbaijan. This is also a very interesting and important matter. There is a need for investment in areas such as artificial intelligence, the creation of digital data banks, and projects in these fields," the expert pointed out.
Karimli emphasized that both directions are crucial for the country.