Scott Osherroff, Chief Investment Officer of the AFC Uzbekistan Fund, shared his views on the favorable conditions for investing in Uzbekistan during an interview with Idea Brunch, published on August 16, 2026.
Osherroff noted that he first visited Uzbekistan in May 2018, approximately eighteen months after the death of former President Islam Karimov. He expressed surprise at the lack of interest from foreign investors in a country with a population of 34 million (now 39 million) and a formal economy valued at $80 billion (now $145 billion), which is supported by gold, copper, and uranium reserves.
At that time, the local real estate market showed a return of 25 percent, and companies on the stock market grew three times above average annually, while the price-to-earnings ratio was below one, and dividend payouts approached 50 percent.
The turning point came in March 2019 after the lifting of foreign currency restrictions, when the fund became the first foreign institutional investor to repatriate proceeds from selling shares on the Tashkent Stock Exchange to Hong Kong. Following this, the AFC Uzbekistan Fund was launched later that same month.
Describing his current positive view of the Uzbek market, Osherroff pointed to the slowdown in inflation—which decreased from 15.2 percent in 2018 to 6.4 percent in July 2026—as well as the stabilization of the national currency. The currency shifted from a double-digit annual devaluation in 2018 to growing by approximately 7 percent in 2025. This environment has led private savings to flow into the banking sector and subsequently into the corporate bond market, where companies are now raising $20 million or more at higher coupon rates in the double digits, compared to previous rates of 30 percent.
Osherroff stated that the Central Bank of Uzbekistan could lower its key interest rate from the current 14 percent to 13 percent by the end of the year if no geopolitical upheavals occur, thereby reducing the cost of capital. He also cited the initial public offering of the Uzbekistan National Investment Fund (UZNF), managed by Franklin Templeton, as a major market catalyst following its dual listing on the London and Tashkent exchanges in May 2026. This event attracted the attention of major global institutions, including JPMorgan, which plans to include Uzbekistan's sovereign bonds in its GBI-EM emerging markets index starting September 30, 2026.
Access to local brokerage services has significantly improved. Whereas opening accounts was previously hindered by infrastructural barriers, foreign retail investors can now open accounts online in about five minutes, with custodian services provided by Bank of Georgia, OTP, and Raiffeisen.
Discussing his investment strategy, Osherroff emphasized that living in Uzbekistan for over five years, conducting on-site checks of portfolio companies, and meeting personally with management helped secure large off-market deals with state structures and private firms. He highlighted the importance of understanding specific economic reforms, such as the abolition of subsidies for oilseeds, which led to a loss of profitability for about 20 vegetable oil processors, as well as the restructuring of the state company Uzbekneftegaz with the assistance of the Asian Development Bank, which affected service providers and structural steel manufacturers.
Osherroff singled out the Uzbekistan Commodity Exchange as an example of strong corporate governance, operational transparency, and consistently high dividend yields. He added that the local financial market regulator is increasingly providing protection to minority shareholders, which benefits the fund's operations.