What was the General State Reserve Fund (SGRF)?
The term State General Reserve Fund (SGRF) means a sovereign wealth fund (SWF) established by the Sultanate of Oman in 1980. The fund was established to manage Oman’s investments incomewith the aim of ensuring the economic stability and sustainable development of the country, and was administered by the Ministry of Finance of Oman.The main export of the Arab nation and, therefore, the main driver of income is oil. The SGRF was associated with the Oman Investment Fund (OIF) in 2020 to create the Oman Investment Authority (OIA) by royal decree.
Key points to remember
- The General State Reserve Fund was a sovereign wealth fund of the Sultanate of Oman.
- It was established in 1980 to manage profits from state oil revenues, diversify Oman’s sources of revenue, and promote local economic development.
- SGRF was dissolved and merged with Oman’s other sovereign wealth funds to form the new Oman Investment Authority.
- The objectives of the newly formed OIA remain the same as those of the SGRF.
Understanding the State General Reserve Fund (SGRF)
Oman’s Ministry of National Economy considered the establishment of the SGRF the most significant achievement of the country’s first five-year development plan. This plan covered the period from 1976 to 1980. This period coincided with a boom in Oil prices. At the time, oil Provisions fell, causing panic, demand to rise and prices to rise dramatically.
The sovereign wealth fund has invested the financial resources surplus was forwarded to him and was intended to do the following:
- Maximize investment income and administer them in a way that minimizes the risks
- Make investments and generate income by spreading your risk criteria
- Strategically direct investment for the long term
- Attracting international investment
- Promote and develop local investments
- Promoting economic development in Oman
The fund’s investment portfolio was diversified in 25 countries, with a wide range of sectors in addition to strategic investments to ensure long-term sustainability Return.His investments included assets tradable on the public market, such as global equities, fixed income bonds and short-term assets.
SGRF has also invested in private non-marketable assets, such as real estate investmentslogistics, commercial and industrial projects as well as other services. For example, the fund acquired a 30% stake in Corporate Commercial Bank – Corpbank for short – Bulgaria’s tenth largest bank by assets.The acquisition was completed in January 2009 for an undisclosed sum.
Special Considerations
The SGRF was officially dissolved after it was merged with the OIF and the Directorate General of Investments of the Ministry of Finance by Royal Decree in June 2020 to form a new legal entity called Oman Investment Authority (OIA).The move consolidated the country’s sovereign wealth funds under one organization at a time when Oman was under intense fiscal pressure due to low oil prices.
Funds assets were valued at more than $14.3 billion at the time of the merger, while OIF was valued at $3.4 billion, according to a report by Pensions and Investments. The assets and employees of each were transferred to the new organization.
The $18 billion Oman Investment Authority (OIA) was created in 2020 by merging SGRF and other legal entities, all of which had the same investment objectives.
The objectives of the newly formed OIA remain the same as those of the SGRF. It invests in more than 35 different international markets, allocating between 65% and 85% in exchange-traded assets, with the remaining part invested in private companies.
OIA’s main investment area is in Europe, followed by the Asian and African markets. Limited investments are held in South and North America and Australia.