Azerbaijan expands strategic investment ties with leading US firms Diversification and sustainable development

Azerbaijani President Ilham Aliyev’s visit to Washington in August set the stage for a significant enhancement of Azerbaijani-American business relations. A key development on this path was his subsequent working trip to New York for the 80th session of the United Nations General Assembly. During this visit, he met with three leading North American financial firms specialising in alternative investment management. Strengthening cooperation in this sector is expected to support the long-term diversification of Azerbaijan’s financial landscape and broaden its international investment opportunities.

The first steps in Azerbaijan’s trade, economic, and investment cooperation with the United States began in the early 1990s, following the signing of the “Contract of the Century.” At that time, American oil companies accounted for roughly 47% of all foreign investment in the domestic oil sector. In the years that followed, U.S. construction firms, hotel chains, and manufacturers of passenger and cargo aircraft operated actively and successfully in the country. Leading American vendors also played key roles as contractors, integrators, and equipment suppliers in Azerbaijan’s telecommunications and IT markets, helping to expand broadband satellite internet access. Additionally, U.S. payment systems and banking network operators have contributed to the digitisation of Azerbaijan’s financial sector, particularly in the development of the country’s cashless infrastructure.

Notably, to jointly finance strategic projects in the region, a proposal was made during the recent meeting in Washington to establish a joint Azerbaijani-American investment platform. Efforts in this direction are being pursued in cooperation with the U.S. Export-Import Bank (US EXIM Bank).

Today, Azerbaijan and the United States are ready to expand cooperation in the alternative investment sector. This specifically involves leveraging the experience, strategies, and methods of leading American companies to manage financial assets that fall outside traditional stocks, bonds, and cash.

The concept of alternative investments includes areas such as participation in private equity projects, venture capital, real estate, hedge funds, commodities, art, and cryptocurrencies. Alternative investing also allows the use of instruments such as derivatives, crowd-lending, investments in high-growth startups, infrastructure projects, or other unique assets.

The goal of alternative investing is to diversify portfolios and achieve higher returns through investments in non-traditional—but comparatively riskier—assets due to their greater market volatility. To mitigate potential risks and maximise returns from such non-traditional assets, fund managers assess risks, construct portfolios to reduce correlation with traditional equity markets, and develop unique trading strategies using artificial intelligence (AI), arbitrage, liquidity optimisation, and various innovative methods.

Within the framework of discussions on these emerging trends, a meeting was held in New York between President Ilham Aliyev and Bruce Flatt, Chief Executive Officer of Brookfield Asset Management, one of the world’s largest alternative investment management firms. During the meeting, it was noted that the successful collaboration between the American company and the State Oil Fund of Azerbaijan (SOFAZ) creates significant opportunities for long-term strategic partnership. The discussion also touched on Azerbaijan’s potential in renewable energy and the country’s prospects for becoming a regional energy hub.

Brookfield Asset Management, founded in 1899 and headquartered in Toronto, Canada, is a leading global alternative investment firm. Its portfolio—comprising over 2,500 active investment assets across various sectors in more than 30 countries, including direct investments, lending, infrastructure, real estate, and renewable energy—is valued at approximately $1 trillion.

Equally productive was the meeting in New York between President Ilham Aliyev and Jonathan Gray, President and Chief Operating Officer of Blackstone. During the meeting, the COO emphasised that the economic reforms and ongoing development processes in Azerbaijan create attractive opportunities for international investors. Highlighting his company’s interest in expanding its successful cooperation with Azerbaijan, particularly with SOFAZ, he also praised the country’s favourable investment climate.

Blackstone, founded in 1985, is a global leader in alternative investment management. Its more than three decades of experience in working with asset owners and operators help preserve the wealth of institutional and individual investors worldwide. The company manages pension funds, sovereign wealth funds, insurance assets, and endowments of prestigious universities, forming investment portfolios in key areas such as infrastructure, real estate (approximately 12,000 properties valued at $30.4 billion), renewable energy, data centres, private equity, and lending. Today, Blackstone’s total assets amount to $1.2 trillion—over 1% of global GDP, significantly exceeding the GDP of some developed countries.

According to information provided to Caliber.Az by SOFAZ, the strategic partnership between the State Oil Fund of Azerbaijan and Blackstone began in 2015. SOFAZ has invested over $1 billion in various real estate and direct investment funds in North America, Europe, and Asia managed by this partner.

For SOFAZ, the partnership with Blackstone represents investments in sectors shaping the global economy of the future, such as artificial intelligence, digital infrastructure, renewable energy, healthcare, logistics, and lifestyle. At the same time, cooperation with a major investment firm like Blackstone generates not only investment returns but also strategic development opportunities. These include the development of logistics hubs in Azerbaijan, strengthening digital infrastructure, implementing green energy projects, and creating and expanding medical research parks.

Another potential partner for Azerbaijan is Neuberger Berman, founded in 1939—a private global asset management firm offering a wide range of investment opportunities and services, including financial planning, fiduciary, and trust services for institutional investors and high-net-worth individuals. These include pension funds, charitable organisations, and sovereign wealth funds, as well as comprehensive wealth planning, fiduciary, and trust services provided through its subsidiary, Neuberger Berman Trust Company. Today, the firm manages assets totaling over $500 billion.

During the meeting in New York, President Ilham Aliyev exchanged views on the current state and prospects of cooperation between Azerbaijan and Neuberger Berman. He told the company’s Chairman and CEO, George Walker, that Azerbaijan places great importance on expanding cooperation with international financial institutions and leading investment firms. It was noted that the fruitful partnership between SOFAZ and Neuberger Berman, ongoing since 2016, has contributed to the development of the country’s financial sector and the expansion of its international investment opportunities.