Azerbaijan’s SOFAZ Joins China-ASEAN Investment Council

Azerbaijan’s state oil fund SOFAZ has joined five Asian sovereign and pension investors to launch the China-ASEAN Joint Investment Council at this week’s China International Fair for Investment and Trade in Xiamen, giving the Caspian fund a founding seat in a market of more than 2 billion people.

The rest of the group spans from Beijing to Jakarta: China Investment Corporation (CIC), the sovereign wealth fund that convened the council, Thailand’s Government Pension Fund, Malaysia’s Khazanah Nasional Berhad and pension fund KWAP, and the Indonesia Investment Authority (INA). Singapore’s CGS International Securities runs the secretariat.

In a record year for the region, trade between China and ASEAN broke $1 trillion for the first time in 2025, reaching $1.05 trillion (€904 billion), up 7.4% year on year, while Southeast Asia attracted a record $243.9 billion (€210 billion) of foreign direct investment, up 9.7%, or 15% of global inflows.

Azerbaijan’s place in that company reflects its position on the global map. The country sits on the Middle Corridor, the rail and sea route that crosses the Caspian to carry freight between Asia and Europe, and to which the European Commission committed €10 billion in 2024 under its Global Gateway programme.

As physical connectivity deepens, SOFAZ says, Azerbaijan’s position as a link between the two regions is becoming increasingly important.

The fund’s case is that capital can move along that route as well as cargo, offering, it says, a place alongside institutions deploying capital at the Asian end of the line, and a wider set of partners for a long-term investor.

SOFAZ entered the Chinese market in 2015, buying its first yuan-denominated assets on 1 July. It has since signed a memorandum of understanding with CIC in April 2025 during President Ilham Aliyev’s state visit to China.

That memorandum turned into capital in April of this year, when SOFAZ established the Galaxy Orientis China-ASEAN Investment Program with CIC and INA.

The private equity vehicle closed its first round at about $520 million (€448 million) against a $1 billion target, and invests in industrials, healthcare, consumer, business services and technology. It is governed separately from the council.

SOFAZ, which manages Azerbaijan’s oil and gas revenues, held $72.6 billion (€62.5 billion) in assets at the end of June. The fund says the council brings access to peer institutions, local market knowledge, and earlier insight into investment themes.

The council begins without capital: it is not a fund, and membership creates no obligation to invest — those decisions stay with each institution. Forums and joint research come first, with capital to follow where interests align.