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Hong kong. – The Fundo Soberano de Angola, the $5 billion sovereign wealth fund of Africa’s second-largest oil producer, is starting investments in hotels and commercial infrastructure in sub-Saharan Africa.
The fund, based in Luanda, may invest in 50 sub-Saharan African hotels over three years, including in its home country, chairman Jose Filomeno dos Santos said in an interview in Hong Kong yesterday.

In addition to the hotel fund, it is also setting up an infrastructure fund that will participate in projects including ports, airports and power plants, added the 36-year-old eldest son of the nation’s President Jose Eduardo dos Santos.

The two-year-old sovereign wealth fund is tapping into the shortage of business hotels and infrastructure in the continent rich in natural resources to boost returns from its global fixed-income and cash holdings.

It plans to allocate half of its initial $5 billion to alternative investments including hospitality, infrastructure, agriculture and mining in the first two years, dos Santos said.

“We believe there’s a lot of investment interest in Africa,” said the UK-educated former banker. “It has a lot of mineral potential, almost a commodity hub. We believe this interest will remain there for the coming years.”

The hotel fund will focus on three-to five-star hotels in sub-Saharan African capitals and other commercial centres, targeting business travellers rather than tourists for their “stable” and “predictable” returns, he said.

In addition to petroleum, demand for hotels is rising from the boom in mining of diamonds and other minerals, as well as the construction industry, he added.

“The number of international standard rooms is still very low and it has a big potential for growth,” he said. – Bloomberg.