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Q&A with Dr. Mohammad Reza Farzin, Chairman of the Managing Board of National Development Fund of Iran

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Mohammad Reza Farin

This interview will appear in the 4Q Y2012 (Jan 2013) issue of the Sovereign Wealth Quarterly.

This is a Q&A with Dr. Mohammad Reza Farzin, Chairman of the Managing Board of National Development Fund of Iran.

Dr. Mohammad Reza Farzin was appointed as the Chairman of the Board of Executive Directors at the end of May 2012 by the NDFI’s Board of Trustee.

1. What was the genesis of creating the National Development Fund of Iran?

The NDFI can be traced back to the Third Development Plan (2000) when a Foreign Currency Reserve Account (known as Oil Stabilization Fund) was established to stabilize the annual budget and prevent the oil shocks doing harm to the economy. The other objective of OSF was to save a portion of oil revenues for future generations through making productive investments. Given the failure of OSF, it was in the Fifth Development Plan (2011) that NDFI was formed to transform a portion of oil revenues to productive investments and the OSF remained in place only with the single task of keeping the annual budget balanced.

NDFI is mandated with transforming the revenues of export of oil, gas, gas condensates and oil products to sustainable and productive economic wealth and investments, as well as saving the share of future generations from these resources.

The General policies of establishment of NDFI were notified by the Supreme Leader.

2. What are some notable achievements of the National Development Fund of Iran since its establishment in 2011?

Since inception in 2011, the resources accumulated in NDF amount to $42 billion. The by-laws and regulations executed and approved, the structure of NDFI is being modified and some highly-educated and experienced people have joined the Fund. A portion of resource has been allocated to the identified domestic sectors, and a portion is frozen for specific projects. Contracts with 12 banks entered into to act as correspondent and agent intermediaries. Our staff is participating in international forums and workshops and we are expanding our net of communications and relations.

3. Will the National Development Fund of Iran invest internationally? If so, are their certain asset classes or geographic markets of interest?[ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]

GIC Buys Large Stake in Nordic Aviation Capital

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Singapore’s GIC Private Limited, a yield-hungry sovereign investor, invested in Denmark-based Nordic Aviation Capital A/S, becoming a significant minority shareholder. Other shareholders in Nordic Aviation Capital include EQT VI Limited fund, KIRKBI Invest (wealth origins tied to Legos), and Martin Møller, the founder of Nordic Aviation Capital. EQT VI will remain the largest shareholder of Nordic Aviation Capital. [ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]

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Trump Wants Pharma Companies to Disclose Drug Prices in Advertisements

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U.S. President Trump is progressing on plans to mandate pharmaceutical companies to reveal their prices in drug advertisements. “The drug industry remains resistant to providing real transparency around their prices, including the sky-high list prices that many patients pay,” Health and Human Services Secretary Alex Azar said in a statement. “So while the pharmaceutical industry’s action today is a small step in the right direction, we will go further.”

The U.S. Health and Human Services Department would require pharmaceutical companies to include drugs’ sticker prices in their video advertisements. This would be similar to how drug companies disclose the laundry list of side effects.

Increasingly, sovereign funds like Temasek Holdings have backed mid-stage pharmaceutical companies and other therapies, while market investors like Norway’s GPFG have large holdings in listed pharmaceutical companies.

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Kazatomprom Treads Closer to IPO

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Kazatomprom is the world’s biggest uranium producer, accounting for around 20% of production market share. The company is moving forward on floating up to a 25% company stake for its planned initial public offering in London and Astana, Kazakhstan. Kazatomprom’s IPO plans are subject to market conditions. The global market price of uranium generated significant price gains year-to-date through almost three quarters. So far, during 2018, the uranium spot price has moved from US$ 20 per pound to US$ 27 per pound.

Kazatomprom’s sole shareholder is Samruk-Kazyna. Samruk-Kazyna would retain at least a 75% stake in the company.

Advisors

Credit Suisse and JPMorgan are joint global coordinators and joint bookrunners for the share offering. China International Capital Corporation, Halyk Finance, and Mizuho International plc were joint bookrunners.

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