ALBAWABA – The Kuwait Investment Authority, or KIA, is being eclipsed by other funds in the Gulf region, Bloomberg reported, with Saudi Arabia and the United Arab Emirates’ (UAE) funds investing nearly ten-fold the value of KIA’s investments in 2022, each.
KIA’s fund is the world’s oldest sovereign wealth fund and one of the largest ever established, with some $700 billion at its disposal.
Nonetheless, it is being overshadowed by the Abu Dhabi Investment Authority’s $25.9 billion and the $20.7 billion invested by Saudi Arabia’s Public Investment Fund last year, as reported by Global SWF.
Notably, Kuwait’s investment authority invested a mere $2.8 billion in 2022, according to Bloomberg.
That is nearly 5 percent the size of the combined investments of Abu Dhabi and Saudi Arabia’s funds.
While the funds’ often-secretive transactions can be hard to track, similar estimates from Javier Capapé reaffirmed the findings of Global SWF to Bloomberg.
“Considering the size of its balance sheet and its long history as a global investor, KIA has been losing momentum against other regional SWFs that are more stable and active,” Diego Lopez, managing director of Global SWF, told the New York-based news agency.
“One of the key reasons is the numerous political changes that Kuwait has gone through recently, which have affected the board and the executive leadership of both the KIA and the Public Institution for Social Security [PIFSS],” he said.
The PIFSS is Kuwait’s public pension fund, whose top leaders were removed last year and still haven’t been replaced.
KIA’s challenges are symptomatic of a broader case of instability at the government and parliamentary levels, battered by five government changes in a year.
There have been a series of investigations into the fund’s investments, and unnamed sources have described to Bloomberg increasing interference from ministers in KIA’s decision-making.
The Future Generations Fund, the wealth fund managed by KIA, reported returns of 33 percent for the year ended March 2021, the most recent publicly available data showed. This included a 38% return from the authority’s London arm, the Kuwait Investment Office.
Many of the world’s dealmakers are looking to the region’s sovereign funds, who collectively control at least $3 trillion in assets, to fund various projects, as other entities pull back.
In recent months, the likes of the $700 billion PIF and $276 billion Mubadala Investment Co. have done deals in everything from aviation to tourism, sports and video games.
But neither Global SWF nor IE University are aware of any deals done by the KIA this year, Bloomberg reported.
Kuwait is well known for its deep domestic frictions and frequent elections.
For more than two years, Kuwait has gone through major political changes. The country’s top leadership changed after Emir Nawaf al-Sabah succeeded his half-brother, who’d been in power for decades.
Since then, there’s been a broad shake-up of major government entities, including the sovereign fund. In June, the country appointed its fifth government in less than a year.
