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Azeri State Fund to Double Gold Reserves, Buy Asian Real Estate

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Jan. 17 (Bloomberg) -- Azerbaijan’s State Oil Fund plans to double its gold holdings this year to 30 metric tons and invest in real estate in Asian capitals as it diversifies reserves.

The fund, known as Sofaz, bought almost 15 tons of bullion last year as part of its plan to spend $1.5 billion to purchase 30 tons of gold in 2012 and 2013, Executive Director Shahmar Movsumov told state television channel AzTV in an interview broadcast late yesterday. Sofaz, which last month announced acquisitions of properties in London, Paris and Moscow, plans to focus on real estate in Asian capitals this year, Movsumov said.

“The fund’s experts visited Singapore, Hong Kong and Malaysia to explore the markets last year,” Movsumov said. “We plan to visit China and Australia this year.”

Sofaz, established in 1999 to manage the Caspian Sea nation’s income from oil and gas sales, increased profit by 2 percent, or almost $700 million, last year, Movsumov said. The fund, which had $33.9 billion of assets as of Dec. 1, keeps 50 percent of its holdings in U.S. dollars, 40 percent in euros and 5 percent in British pounds. Last year it added assets denominated in the Australian dollar, Russian ruble and Turkish lira, Movsumov said.

It’s pursuing a “very conservative” investment policy to safeguard the stockpile, according to Movsumov.

“The most important task today is to preserve the reserves rather than to increase them,” he said.

To contact the reporter on this story: Zulfugar Agayev in Baku at zagayev@bloomberg.net

To contact the editor responsible for this story: Hellmuth Tromm at htromm@bloomberg.net