A new Sovereign Wealth Fund joins the airport investment fraternity: Azerbaijan’s SOFAZ

Azerbaijan's Sovereign Wealth Fund, SOFAZ, has joined the ranks of airport investors, with a small GBP50 million investment into London Gatwick Airport in tandem with existing investor GIP, once the operator there but now a minority shareholder, just (49.9%).

The investment does not affect the ownership of the airport's operating company and is being seen as more of a partnership arrangement, with SOFAZ using the opportunity to feel its way into the business by linking up with organisations that are long established in the sector.

That may seem unusual but it makes sense. SOFAZ has no experience of airports, but it does bring knowledge of other sectors, like solar farms, that could prove useful.

London Gatwick was so badly impacted by the COVID-19 pandemic that a deal like this would not have been credible only a couple of years ago but a renaissance, together with other factors and coupled with government support for a new runway, has changed the game.

The question now is how this new investor, the second SWF to get itself involved with London Gatwick, will work with other interested parties there, for there are many. There is at least no suggestion of any tension between the two main shareholders, GIP and VINCI Airports, which hold almost equal equity.

The other question is to what degree if any SOFAZ will wish to invest, in any way, at other airports in Europe, because opportunities will assuredly arise despite the sluggish level of M&A activity in the sector.