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Mr. Andrew Rozanov is Managing Director and  Head of Sovereign Advisory at Permal Group. In this capacity Rozanov is responsible for developing Permal’s relationships with sovereign wealth funds. 

Education

Mr. Rozanov holds a master’s degree in oriental studies, with a concentration in Japan,  from Moscow University. The distinguished SWF expert Rozanov, lived, studied and worked in Japan for 20 years and is fluent in English, Russia and Japan. Mr. Rozanov is a Chartered Financial charterholder and he also holds designations of Financial Risk Manager (FRM) from the Global Association of Risk Professionals and Chartered Alternative Investment Analyst (CAIA) from the CAIA Association.

According to State Street Bank the well respected Mr. Rozanov first introduced the term “sovereign wealth funds” in a 2005 publication. He has written extensively on SWF’s and his work has been published in The Wall Street Journal, Central Banking Quarterly Journal, Professional Investor, Vedomosti Financial Daily and The World Today. Rozanov esearch has also been referred to and analyzed extensively in Euromoney, The Economist, Reuters, Smart Money, Les Echos, Finance Asia and RGE Monitor.  

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SWF Visionary – Mr. Andrew Rozanov – Head of Sovereign Advisory at Permal Group.

Investment Philosophy China & Japan & Global Expertise 

Rozanov held a variety of roles at State Street Global Markets, where he was managing director and head of sovereign advisory, portfolio and risk management group. In this high level capacity, Rozanov provided specialist portfolio advice to sovereign clients and other large institutional investors. Mr. Rozanov also worked in State Street’s Japan office as a fund manager focusing on global fixed income, currency and asset allocation. During his time in Japan, Mr. Rozanov also worked as director in the Equity Capital Markets Group at UBS Investment Bank in Tokyo. For over five years the eminent Mr. Rozanov has been advising and servicing central banks and sovereign wealth funds on various aspects of reserve management.

In a recent August 2013 article, Mr. Rozanov developed a proposal that would help Asian policymakers achieve three goals simultaneously; “shrink sovereign balance sheets by reducing excess reserves, stabilize and diversify their assets to critical energy and mineral supplies, and develop their financial and commodities markets.” 

As an SWF expert Mr. Rozanov has laid out a plan noting that China’s acquisitive approach has sparked controversy and resistance in target markets. From Rozanov perspective one solution might be for China to use its foreign reserves or SWF funds to build up a strategic reserve beyond what is typically recommended by the International Energy Agency (IEA), which has prescribed a minimum of 90 days’ net crude import reserves for oil-importing nations. China’s policymakers have been building up strategic petroleum reserves to lessen the risk of supply distributions.

As a strategic thinker Mr. Rozanov research produced a number of innovative & creative ideas to be implemented by the Chinese government. For instance a cost-effective and market game changer is for China to create exchange-traded funds physically backed by strategic commodity reserves, denominated in local currency and distributed widely among domestic and international investors.

In his analysis, Mr. Rozanov noted that China’s monetary authorities could use a small portion of the country’s $3.5 trillion in reserves to build up its domestic holdings of all kinds of commodities. In his high-level policy analysis Rozanov notes that “instead of keeping these assets on the government’s balance sheet, they could issue remind-denominated ETF shares backed by the commodity pools and market them to the private sector.” Mr. Rozanov felt that strategic planners in Beijing would get the next best thing to natural-resource endowment. Ultimately Mr. Rozanov innovative approach would provide access to massive commodity stockpiles owned and carried by the private sector yet dominated in the local currency and directly available to the Chinese government in a crisis.

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As mentioned above, Rozanov is well-known for coining the term “sovereign wealth fund” in an article he wrote for Central Banking Journal in 2005. This principle of a commodity-backed ETF program, could prove useful in Japan. As Mr. Rozanov recently noted in his published research that “Japan could expand its strategic oil reserves beyond the levels recommended by the IEA” and the Government Pension Investment Fund of Japan, the world’s largest pension scheme, with $1.15 trillion in assets under management, could allocate substantial sums to such vehicles.

in the case of Japan, quantitative and qualitative easing underpins the aggressive inflationary policies of Abenomics, the economic-revival policy mix launched in January by Prime Minister Shinzo Abe. The Bank of Japan is committed to buying government bonds but also domestic investment trusts and most importantly equity ETFs. Therefore as the BOJ acquires more assets of these ETF shares, the private sector would be encouraged to exchange more Japanese Yen for U.S. dollars to procure and deliver the underlying physical commodities into the ETF vehicles. This approach would ultimately help to develop both countries underlying commodities options and the ever resourceful Chinese and Japanese Governments.

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SWF Expert and Permal Managing Director Mr. Andrew Rozanov with Mr. Jacques Mandeng, fr. Deputy Head of the International Monetary Fund.

Conclusion 

As head of sovereign advisory at Permal Group, Mr. Rozanov will be responsible for providing advice and managing $20 billion in funds of hedge funds. Mr. Rozanov recently wrote a book entitled “Global Macro: Theory and Practice” dealing with global macro strategies with a specific focus on top-down macroeconomic and political views of individual countries and asset classes. It’s difficult to correctly sum up the achievements of such a high level sovereign wealth fund leader who coined the term “sovereign wealth fund.” Mr. Rozanov is one of the most prominent sovereign wealth fund leaders and his practical solutions will continue to shape the global financial markets well into the future.