The Fund plays an important role for the entire population of Kazakhstan.
Samruk Kayzana is the Kazakhstani Wealth Fund and a joint stock company that was established only 9 years ago, in 2008. The Fund is one of the biggest stakeholders in many business and economic areas of the country, and therefore, it plays an important role for the entire population of Kazakhstan. The Fund has made the decision to undergo a sort of mini-reformation, reviewing and testing its performance in the last five years to take further more efficient steps with the goal to reach the level of big shot international funds which generate bigger profits.
The Fund is managed by the Board of Directors, whereby, Bakytzhan Sagintayev, the Kazakhstani Prime Minister is the Chairman of the Board. The Fund is seated in Astana in Kazakhstan, and its total assets come to a nice sum of around $78 billion.
It was founded on the basis of the Decree of the President and is very significant since it is the owner or co-owner of some of the biggest Kazakhstani companies. The public postal office, national railroad, and the public oil and gas company are just some of the big companies found on the Fund’s list. The stock company actually emerged from the merger of two joint stock companies, namely the Kazakhstan Holding for the Management of State Assets SAMRUK and Sustainable Development Fund KAZYNA.
The joint stock company is entrusted with managing the shares of the country’s institutions, public companies, and other organizations and entities in order to optimize their competitiveness at the global level and in the international markets.
They ar ein charge of maintaining economic growth and stability of the country and to keep it safe from any possible negative effects that the world markets might go through (again). As we can see the Fund was established in the same year when the financial crisis hit the world starting with a major crash on Wall Street and expanding in a domino fashion to the rest of the world.
The Samruk Kazyna Fund rests on principles of transparency, fairness, flexibility, and efficiency.
The Fund’s main objective is a diversified and modernized economic system through different measures like the Strategy of Industrial and Innovation Development of Kazakhstan 2003-2015 which represented a step in the right direction. The investments are allocated based on priority areas and, of course, as a country rich in oil and gas, it is no surprise that oil and gas rank first for investments. Second comes power, metallurgy, and chemistry ranks fourth, leaving infrastructure the fifth and the last priority area for investment.
The Funs is also responsible for investment projects on the national, regional, and global level. The Fund makes sure that the projects are implemented according to plan. Besides investment projects, the Fund also takes care of social projects in the country which should spur further development.
In 2013 the Fund decided to undergo a major transformation in order to be able to keep up with international funds. Their analysis has shown that funds in other countries raise more income than they do, and they launched the Transformation Project which represents a major change from top to bottom. This means that the Fund is ready to change its activities and operations from the core, and subsequently, the Samruk Kazyna owned companies have to do the same. The Fund has in mind to enter new markets by entering new industries which should diversify the Fund’s activities and bring in profitable investments.
The Transformation Project is supposed to last five years, and its implementation should be carried out on a step-by-step basis. The first step includes three new pilot portfolio companies, whereby the second phase has in mind all 12 companies that are palnned. The first phase is expected to be completed by the end of the year, whereby an analysis will be conducted to see how the changes affected the portfolio companies and if their performance improved. If it all goes well, the Fund will proceed with the reform in its other portfolio companies as well.
So far, things look good for Kazakhstan, a country which was also affected by the 2008 crisis when oil prices dropped leaving the country in recession for a considerable time. Still, Kazakhstan is now positive to create a better future and an efficient economy via the Samruk Kazyna Fund.