The Russian government is in talks with UBS and other Swiss banks on the management of its two oil wealth funds which total $163 billion, Deputy Finance Minister Dmitry Pankin said on Tuesday.
"Swiss banks would like to take part, first of all UBS, both as an adviser and an asset manager," Pankin said after meeting Swiss Economy Minister Doris Leuthard. Pankin said Russia would hold a tender to choose asset managers. Russia split its oil stabilisation fund earlier this year into a $130 billion Reserve Fund, which will cushion the budget from a fall in oil prices, and a $33 billion National Wealth Fund (NWF) earmarked for riskier investments.
Both funds now invest in top-rated bonds, on which returns are low. The Finance Ministry, which runs both funds, and the central bank, which acts as the government's asset manager, have to draft proposals on the fund's investment strategy by October 1.
Russia plans to set up a government agency which will manage its sovereign wealth fund and will resemble the Abu Dhabi Investment Authority, which agreed last November to buy $7.5 billion of stock in Citigroup. The agency will then hire international advisers and hold open tenders in which both Russian and foreign asset managers can take part.
Russia's most controversial acquisition to date was the purchase of a 5 percent stake in European space and aviation giant EADS by state-controlled bank VTB, which caused political shivers in France and Germany. Last month a newspaper report that Russian billionaire Suleiman Kerimov was interested in buying stakes in major European banks and wants other tycoons to join him, briefly lifted shares in several banks, including UBS.