Fund of the Month (Dec’22): Armenia’s ANIF
Armenia’s ANIF is one of the latest additions to the SWF industry globally. The fund acts as a catalyzer of foreign investment into the country and has signed important partnerships with Masdar and Air Arabia, among others. In June, it became the first foreign Sovereign Fund to open an office in the UAE. We had the pleasure of speaking with its CEO about the fund’s plans.
[GSWF] ANIF was established in 2019 as a holding of some of Armenia’s largest assets. How do you define ANIF, and was the fund modelled after any SWF?
[ANIF] When we set it up the main challenge was the utility, its usefulness and not its size. We needed a bridge between local and international investors and the Armenian economy. Our main focus was to set-up an entity with Western corporate governance practices such as a truly independent board and investment committee. We are proud of keeping that structure alive and effectively working after four years, especially in our part of the world.
[GSWF] What do you think ANIF’s optimal AuM is, and do you expect more transfers of state companies in the future?
[ANIF] We do not really have a target balance sheet, but we would like to accomplish a certain degree of growth. So far, we are only investing in Armenia, but we will change that in the future. As per further assets, we have active conversations with the government, but we believe we can add more value with greenfield projects versus taking over legacy assets.
[GSWF] How did your JV with Air Arabia come about, and how will Fly Arna be different than other Armenian airlines?
[ANIF] Fly Arna has brought in a new corporate culture, safety and customer service standards, and we have ambitious plans of further growth. Right now, we are linking Armenia with Middle East and Russia and are planning to expand towards mainland Europe and East Asia, most notably linking Europe with India. The company has now 80 employees and is performing above our initial expectations.
[GSWF] ANIF signed a JV with Masdar for the construction of a 200MW solar plant in Armenia. How important is ESG?
[ANIF] We are looking for any asset that will have a decarbonization effect and broader positive ESG impact in our country, including but not limited to waste treatment. The deal with Masdar was the most important we have done so far, because (i) it is the largest renewable project in Armenia and the region producing just under 7% of the country’s electricity; (ii) it has attracted a prime name into the country, and we are learning from their significant expertise; and (iii) we closed a phenomenal deal with a price of only US$ 2.9 cents per KW.
[GSWF] ANIF recently became the first foreign Sovereign Investor to set up an office in Abu Dhabi’s free zone, Abu Dhabi Global Market (ADGM) – has this been a reflection of your various JVs with UAE entities?
[ANIF] We just thought that we have so many ongoing discussions with organizations in the UAE that we need a physical presence there. We are still unsure of the size of the team that will be there but we are on the ground and running as we speak.
[GSWF] On the other hand, your Moscow office is no longer listed in your website. What happened with the MoU with RDIF?
[ANIF] The MoU with RDIF lapsed in June of this year and has not been renewed, and we have taken the decision of discontinuing our Moscow office. We do not have any other agreements or ongoing work with Russia/Russian entities.
[GSWF] How many people does ANIF employ and what do you think your optimal size in terms of personnel is?
[ANIF] We are very close to or at our optimal size, with 55 employees .
[GSWF] What summary do you make of the past 3.5 years leading ANIF and how do you compare them with your previous life as an investment banker? What would you like ANIF to accomplish in the next say five years?
[ANIF] We think about our impact constantly and our first impact report will be published on December 12, covering “ESG+F”, meaning the impact that ANIF and its projects have had on ESG matters but also our financial impact on the country. Today, we are much better organized than we were a couple of years ago and have two people tasked with evaluating the impact of our footprint regularly.
Personally, my current position is more than a job compared to my previous posts. I am having a great time, enjoying everything we do at ANIF, and learning from all the mistakes. I want to keep doing what I can, hopefully with less errors and more achievements.