Kuwait wealth fund’s London arm manages $250 billion in assets

London: The London arm of Kuwait Investment Authority, which manages the country’s sovereign wealth fund, has $250 billion of assets under management, KIA Chairman Saad Al Barrak said.

The Kuwait Investment Office’s AUM grew from $27 billion in 2003 to $250 billion this year, Al Barrak, who’s also minister of state for economic affairs and investments, said in London on Tuesday during an event marking the KIO’s 70th anniversary.

The figure is lower than one mentioned in a 2020-21 report by Kuwait’s State Audit Bureau, an accounting watchdog attached to the parliament, which said the KIO had assets of $264.5 billion, as of March 31, 2021.

The Kuwait Investment Board was established in London in 1953, eight years before OPEC-member Kuwait gained independence, to invest surplus oil revenue and help diversify the economy. The board was later replaced by the Kuwait Investment Office, and in 1982 the KIA was set up as its parent entity.

The KIA, which doesn’t usually disclose the value of its assets, manages the Future Generations Fund, estimated at over $700 billion, as well as the General Reserve Fund, or treasury.

The KIO mainly invests directly, predominantly in public equities and fixed income but also in alternatives like real estate and private equity. The London office has been a prolific investor, and participated in the US listing of private equity firm TPG.

The KIA is the world’s oldest and one of the largest wealth funds. It has stakes in ports, airports and power distribution systems around the world. The fund boosted its holdings of US assets when markets plunged in 2020, and the FGF reported returns of 33 per cent for the year ended March 2021.

UK investments

Kuwaiti investments in the UK have risen to $42 billion from $9 billion two decades ago, Al Barrak said, after the countries signed an MoU on investments on Tuesday. The Gulf state plans to boost its economic partnership with the UK and substantially increase investments there.

With current investments focused mainly on real estate and infrastructure, both sides are looking at how Kuwait can diversify its interests into areas such as technology, life sciences and renewables, while helping to create jobs in both countries. The two sides also signed a deal to cooperate on cybersecurity as part of Kuwait’s plans to develop a national center for cybersecurity.

Kuwait last month reported a budget surplus of $21 billion in the last fiscal year, ending nine straight years of deficits due to higher oil prices and more controlled spending. At the time, Al Barrak, who is also the country’s oil minister and acting finance minister, said Kuwait has one of the lowest sovereign debt to GDP levels globally.