State Oil Fund of the Republic of Azerbaijan (SOFAZ)

Azərbaycan Respublikasının Dövlət Neft Fondu · Azerbaijan · Asia · Founded 1999 · Savings and future generations fund · IFSWF full member

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Focus

SOFAZ: what it invests in

Infrastructure and utilitiesTransport and logisticsRenewables and climateTechnologyReal estate

Fixed incomePublic equitiesCommodities and goldReal estateInfrastructurePrivate equity

Geography Global

Scale

SOFAZ: how big it is, and on what basis

USD 72.6B

Total assets (balance sheet)As of 2026-07-23

In US dollars: about USD 72.6B. Fund reports in US dollars and manat.

Return 2025 6.2%

Transparency

SOFAZ: what it publishes

9.0 of 10 Band 5 of 5

Published 8 · Partly 2 · Not published 0

Our 10 item score. It measures what is public, not how well a fund is run.

Total assetsS6: USD 72.6B (AZN 123.4B, 30 June 2026); As of 2026-07-23
Return 2025S4: 6.2%; As of 2026-01-27
Gold shareS7: 31.4% (178.1 tonnes); As of 2026-06-30
Assets to GDPS2: About 94%; As of 2025-09-30
Budget transfer 2025S4: AZN 14.5B; As of 2026-01-27
CountriesS2: 60+; As of 2025-09-30
Transparency scoreS15: 9 of 10; As of 2026-06-30

At a glance. SOFAZ is Azerbaijan's oil fund. It collects the state's oil and gas revenue, invests it abroad and funds the state budget. Assets were USD 72.6 billion (AZN 123.4 billion) at 30 June 2026, about 94 percent of GDP. The portfolio is unusual for its gold: 178 tonnes, or 31.4 percent, beside index-tracking equities, high-grade bonds and a growing book of private real estate and infrastructure. S6 S7 S2

Key points

Returned 6.2 percent in 2025 (AZN 6.9 billion) and grew assets 22.5 percent to USD 73.5 billion, helped by gold. S4
Transferred AZN 14.5 billion to the state budget in 2025 and AZN 6.4 billion in the first half of 2026. S4 S6
June 2026 mix: fixed income 33.8 percent, gold 31.4, equities 28.1, real estate and infrastructure 6.7. S7
Invests in more than 60 countries; North America 27.5 percent and Europe 27.0 percent at June 2026. Its rules bar investment at home. S7 S2
Equities track the MSCI World index; private markets are where it looks for extra return. S8 S2
Up to 60 percent can be run by external managers, no more than 5 percent by any one. S9
IFRS accounts audited by PwC, which also won the tender for 2026 to 2028. S2 S10

Interesting facts

It started with about USD 270 million in 1999; the equity book alone has made almost USD 10 billion of gains since 2012. S2 S11
It bought 53.4 tonnes of gold in 2025 to reach 200 tonnes, then sold 22.1 tonnes in early 2026 to fund budget transfers. S11 S12
Its CEO became Deputy Chair of the IFSWF board in November 2024, with SOFAZ due to chair the forum next. S13

Mandate and goals

The Statute tasks SOFAZ with building up and managing foreign currency assets from oil and gas agreements for citizens today and future generations. S1

Shield the state budget from oil price swings and support macroeconomic stability. S2
Save oil wealth for future generations. S2
Finance projects of national importance. S2
Return target: Highest possible return while keeping the risk of losing principal low (2026 budget decree). S9
Spending rule: Transfers to the state budget are set each year by presidential decree; AZN 14.5B in 2025, with plans to fall to AZN 10.2B by 2029. S4 S8

How it invests

Industries	Infrastructure and utilities, Transport and logistics, Renewables and climate, Technology, Real estate. Sector agnostic S20 S2
Asset classes	Fixed income, Public equities, Commodities and gold, Real estate, Infrastructure, Private equity, Cash and money markets S7
Stages	Public markets, Infrastructure, Real estate, Buyout S2 S17
Geography	Global. June 2026: North America 27.5 percent, Europe 27.0, Asia 9.9, Middle East 1.4, gold 31.4. At least 85 percent in US dollar, euro and sterling assets S7 S2
Direct / through funds / co-invest	Yes / Yes / Yes S9 S2
Ticket size	No ticket size is published. S16
Deal sizes seen	EUR 20M (Azzurra Capital, 2025) to GBP 177.4M (78 St James's Street, London)
External managers	Named managers include BlackRock and GIP, Brookfield, EQT, PGIM, CVC, JP Morgan, Franklin Templeton, Blackstone, Neuberger Berman and KKR S21 S22
Co-investment programme	Takes minority positions in sponsor-led vehicles, such as GIP for Gatwick and Italo S16

Asset mix: Fixed income and money market 33.8%, Gold 31.4%, Equities 28.1%, Real estate and infrastructure 6.7% (as of 2026-06-30) S7

Largest holdings: Gold (London good delivery bars) USD 22.8B (as of 2026-06-30) S7

Published criteria

2026 targets: fixed income 30 percent, equities up to 25, real estate and infrastructure up to 10, gold up to 35, each with set bands. S9
Funds and co-investments in the equity book capped at 7 percent of the portfolio. S9
No more than 10 percent in any single institution or asset, and at least USD 100M in money market instruments. S9
External managers need an investment-grade rating, or five years of positive record, or USD 1B under management. S2
No domestic investment, no lending to state bodies and no use of assets as collateral. S2 S1

Past investments

Year	Investment	Type	Sector	Stage	Amount
2025	London Gatwick Airport. Minority stake alongside Global Infrastructure Partners. S16	Co-investment	Infrastructure and utilities	Infrastructure	GBP 50M
2025	Italo. Investment through a GIP-led vehicle. S16	Co-investment	Transport and logistics	Infrastructure	Not published
2025	Azzurra Capital Fund I. Commitment to a Dubai private fund. S22	Fund commitment	Multi-sector	Buyout	EUR 20M
2024	GEMS Education. Co-investment in the Dubai schools group. S22 S8	Co-investment	Education	Buyout	USD 100M
2024	Private markets fund commitments. Commitments to GIP, EQT, Brookfield, PGIM and CVC funds in real estate, private equity and infrastructure. S22	Fund commitment	Infrastructure and utilities	Not stated	USD 500M
2022	Central Bank of the Republic of Turkiye deposit. Six-month deposits rolled until 2024, then repaid and moved into bonds. S2	Direct investment	Financial services	Credit	EUR 1B
Not published	78 St James's Street, London. First direct property purchase. S17	Direct investment	Real estate	Real estate	GBP 177.4M
Not published	Gallery Actor, Moscow. Office and retail building on Tverskaya Street. S17	Direct investment	Real estate	Real estate	USD 133M
Not published	Southern Gas Corridor. National project financing for the gas export route. S23	Direct investment	Energy: oil and gas	Infrastructure	Not published
Not published	Baku-Tbilisi-Ceyhan pipeline. Funded the state's equity share in the oil pipeline. S23	Direct investment	Energy: oil and gas	Infrastructure	Not published

Case studies

What: Bought a minority interest in London Gatwick Airport through a GIP-led vehicle.
When: October 2025
Size: GBP 50M
Why: The CEO framed it as partnering with leading institutions on resilient, large, long-term assets.
Outcome: VINCI Airports remains majority owner with 50.01 percent.

Gold as a strategic reserve S11 S8 S12

What: Built gold to 200 tonnes, 38.2 percent of assets, by end 2025.
When: 2012 to 2026
Size: USD 28.1B at end 2025
Why: SOFAZ treats gold as part of national reserves and a hedge, not a short-term return asset.
Outcome: Sold 22.1 tonnes in early 2026 to help meet budget transfers; 178.1 tonnes held at June 2026.

Investment process

The President approves the annual budget and investment rules by decree. A seven-member Supervisory Board chaired by the Prime Minister controls the fund and meets at least quarterly; the CEO runs it day to day with an Investment Committee. S2 S1

Committee	Role
Supervisory Board	General control; seven unpaid members, chaired by the Prime Minister S18 S2
Investment Committee	Approves managers and private deals after review S2
Risk Management Department	Asset allocation, risk and performance, and alternative investment risk S2

Annual decree sets the asset targets, bands and limits. S9
Managers are chosen through a public procurement RFI and RFP, then a cross-functional review. S2
Each private deal passes legal, compliance, risk and investment review, with outside sector experts where needed. S2
Investment Committee decision. S2

How to approach: Managers can respond to public procurement tenders. There is no open intake for deals; general contacts are on the SOFAZ website. S2 S24

Size and returns

Headline size: USD 72.6B (Total assets (balance sheet), as of 2026-07-23) S6 S7
In US dollars: about USD 72.6B. Fund reports in US dollars and manat.
In manat: AZN 123.4B (Total assets (balance sheet), as of 2026-07-23) S6
End 2025: USD 73.5B (Total assets (balance sheet), as of 2026-01-27) S4
Return, 2025: 6.2 percent (AZN 6,894.1M; equities added 4.3 points, fixed income 1.8) S4
Size over time (USD billion): 2025-01 61.7, 2025-03 62.7, 2025-06 66.5, 2025-09 70.2, 2025-12 73.5, 2026-03 73.5, 2026-06 72.6 S4 S7 S12 S14

Leadership

Name	Title	Since
Israfil Mammadov	Chief Executive Director S5	2019-11-29
Rovshan Javadov	Deputy CEO S25	2020-03-02
Bahruz Bahramov	Deputy CEO S26	2024-06-12
Vadim Pshenichniy	Advisor to the CEO S27	Not published
Ali Asadov	Prime Minister; Chairman of the Supervisory Board S2 S18	Not published
Shahmar Movsumov	Assistant to the President; Supervisory Board S2 S18	2019-12
Sahil Babayev	Minister of Finance; Supervisory Board S2 S18	Not published
Mikayil Jabbarov	Minister of the Economy; Supervisory Board S2 S18	Not published
Taleh Kazimov	Chairman of the Central Bank; Supervisory Board S2 S18	Not published

Governance and transparency

Legal basis: Presidential Decree No. 240 of 1999 and the Statute of 2000, amended several times through 2018 S1
Oversight: President, Supervisory Board and Chief Executive Director; audited report goes to the President and is published S2
Auditor: PwC Audit Azerbaijan, for 2022 to 2025 and again for 2026 to 2028 S2 S10
Santiago Principles: Full IFSWF member; self-assessment against all 24 principles since 2011, reviewed yearly S2 S3
Proxy voting framework since October 2024: 671 proposals voted at 86 meetings in 18 countries. S2

Transparency score: 9.0 of 10 (band 5 of 5). Our own 10-item rubric; see the methodology page.

Published: total assets, annual return, asset allocation, geographic or sector split, audited financial statements, governance and mandate documents, named leadership, regular reporting schedule. S1 S2 S4 S5 S7 S15 S18 S19
Partly published: long-term returns, holdings or deal list. S2 S16 S17

History

Date	Event
1999-12-29	SOFAZ created by Presidential Decree No. 240. S1
2012	Diversification into gold, equities and real estate begins. S2
2019-11-29	Israfil Mammadov appointed CEO. S5
2024-11-05	Elected IFSWF Deputy Chair. S13
2025-10	Gatwick investment alongside GIP. S16
2025-12-31	Assets reach USD 73.5B; gold at 200 tonnes. S4
2026-03	22.1 tonnes of gold sold in the first quarter. S12
2026-06-30	Assets at USD 72.6B. S6

For family offices

SOFAZ has no programme for private investors. It invests beside institutional sponsors and through established fund managers, so families meet it as co-investors in sponsor-led deals. S16 S2

Co-invest in the same sponsor-led infrastructure vehicles, as with GIP on Gatwick and Italo. S16
Managers meeting its eligibility rules can bid in its procurement tenders. S2

Reports

Investment highlights, first half of 2026: https://www.oilfund.az/storage/uploads/oqc1rqu5ms.pdf S7
Report archive: https://www.oilfund.az/en/report-and-statistics/report-archive S19
Santiago Principles self-assessment 2025: https://www.ifswf.org/assessment/sofaz-2025 S2

Common questions

How big is SOFAZ?

USD 72.6 billion (AZN 123.4 billion) at 30 June 2026, after USD 73.5 billion at end 2025. S6

Why does SOFAZ hold so much gold?

It treats gold as a strategic reserve and hedge. Gold was 31.4 percent of assets, 178.1 tonnes, in June 2026. S8 S7

Can SOFAZ invest in Azerbaijan?

No. Its rules bar domestic investment, though budget transfers fund projects at home. S2

Who runs SOFAZ?

Chief Executive Director Israfil Mammadov, since November 2019. S5

How can a fund manager work with SOFAZ?

Through its public procurement tenders. Managers need an investment-grade rating, five years of record or USD 1 billion of assets. S2

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Sarawak Sovereign Wealth Future Fund Malaysia (Sarawak) · RM 8.6B
Brunei Investment Agency (BIA) Brunei Darussalam · Not disclosed, estimate

All sovereign wealth funds in Asia · All savings and future generations funds · All funds in Azerbaijan

Sources

Disclaimer

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