Kuwait Investment Authority

kuwait investment authority

State of Kuwait US$ 342 Billion
Established: 1953
Transparency Rating: 6
View Sovereign Fund Transaction Data
View Asset Allocation		 Origin: Oil
Firm Investment Style: Mixed
Entity Structure: Funds
Population Est.: 2.82 million – 2012
Wealth Per Capita Est.: $121,300
Summary
The Kuwait Investment Authority (KIA) is the parent organization of the Kuwait Investment Office (KIO), which was initially established as the Kuwait Investment Board. The Kuwait Investment Authority invests in domestic and international markets with its main office in Kuwait City and branch offices in Beijing and London.

Background
The Kuwait Investment Office owes its existence to Sheikh Abdullah Al-Salem Al-Sabah, the ruler of Kuwait from 1950-1965, who decided that the oil revenue would be used for the people of Kuwait.

The Kuwait Investment Board was established in London on February 23rd, 1953 when Sheikh Abdullah Al-Salem Al-Sabah decided that oil revenue could be used to create a fund for the future and reduce its reliance on a single non-renewable resource. In 1961 the Minister of Finance, Sheikh Jaber Al-Ahmad Al-Jaber Al-Sabah, created the main investment policies for the fund that are still in use today.

The Kuwait Investment Office (KIO) replaced the Kuwait Investment Board in 1963 and is based in the City of London. As a global and long-term investor, the KIO manages the Reserve for Future Generations and the General Reserve Fund, which was created in 1976. Investments of all asset classes are made in all geographical areas. Objectives of the KIO include maintaining the real value of the funds entrusted to the Office for the Future Generation Fund, achieving a fair return over the long-term, and to increase the favorable reputation as an expert and progressive institution in the international financial markets.

The Kuwait Investment Authority ensures that the State of Kuwait transfers 10% of oil revenue into the Reserve for Future Generations on an annual basis.

Strategy & Objectives
The Kuwait Investment Authority is a long-term institutional investor. They have an in-house investment management team called the Kuwait Investment Office (KIO).

Governance
Kuwait Investment Authority’s management reports to the Board of Directors, which consists of four ex-officio members and five members representing the private sector, who are appointed by the Council of Ministers through an Amiri Decree. The Board of Directors appoints a Managing Director (the Chief Executive) from one of the private sector representatives. KIA’s board of directors is headed by the Minister of Finance, with other seats allocated to the Energy Minister, Governor of the Central Bank of Kuwait, Undersecretary of the Ministry of Finance, and 5 other nationals who are experts in the field, 3 of which should not hold any other public office.

Transparency
Under the Law No. 47 of 1982 of the State of Kuwait regarding the establishment of the Kuwait Investment Authority, there are three clauses that are related to transparency and the disclosure of information. Clauses 5, 8, and 9 require that the Kuwait Investment Authority presents detailed reports pertaining to assets under management to the Council of Ministers and that disclosure to the public of any information related to KIA’s work is subject to penalties.

Sovereign Wealth Enterprises

National Technology Enterprises Company of Kuwait (NTEC)
National Technology Enterprises Company of Kuwait

NTEC is the direct venture capital conduit for the Kuwait Investment Authority. It was created in 2002 with around US$311 million in start up capital.

St Martins Property
Value: £3 billion
st martins property
Independently established in 1924, it is a development, investment and asset management company with a diverse portfolio throughout the United Kingdom, Europe and Australia. The London-based company is the real estate investment arm of the State of Kuwait. For over 80 years, St Martins has had significant holdings in the City of London.

Kuwait Real Estate Investment Consortium K.S.C.
Value: $88.3 Million

Organized as a Kuwaiti shareholding company on October 1975, it is a sovereign wealth enterprise of the Kuwait Investment Authority. KIA owns 99.127% of this sovereign wealth enterprise (SWE). The SWE is engaged in carrying out real estate transactions, investment in securities and investment in portfolio management activities domestically and internationally.

The Kuwait Real Estate Investment Consortium also owns 100% of the Kuwait Distinguish Real Estate Group, WLL.

Established in 1994, they also own the Lebanese Real Estate Investment Consortium (LREIC). The LREIC invests in housing development.

Kuwait China Investment Company (KCIC) K.S.C.
Value: $324 Million (2011)
Kuwait China Investment Company

A 15% stake is owned by the Kuwait Investment Authority. Some of this company is open to the public.

It is a key investment vehicle for the KIA in Asia to take advantage of growing trade flows between the region and the Gulf, across sectors including agriculture, property, infrastructure, energy, and financial services.

In December 2005, the KCIC was formally incorporated by an Amiri Decree as a Kuwaiti shareholding company with a total capital of US $ 280 million.

Fosterlane Management
Fostelane Management is a sovereign wealth enterprise based in the United States. It is the American institutional real estate arm of the Kuwait Investment Authority.

Major Direct Foreign Investments (Public)
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