The Kuwait Investment Authority likely broke into the world’s top three sovereign wealth funds by assets.
The Future Generations Fund, managed by the authority known as the KIA, has risen to a record of about $700bn, according to a person with knowledge of the matter. Its assets were valued at around $670bn at the close of the last fiscal year on March 31, the person said, asking not to be named discussing confidential information.
The fund, a national savings pot designed to help the country prepare for life after oil, has more than half of its investments in the US, where equity markets have been on a tear. The benchmark S&P 500 Index surged more than 8% last quarter, its fifth consecutive three-monthly gain, while the MSCI World Index gained more than 7%.
The KIA, the world’s oldest sovereign wealth fund whose roots predate the birth of the modern state of Kuwait, doesn’t officially disclose the value of its assets. KIA officials couldn’t immediately be reached for comment.
The increase would mean that the KIA, which also manages the nation’s General Reserve Fund, has amassed more assets than Abu Dhabi Investment Authority, the emirate’s rainy-day fund, which is estimated by the SWF Institute to have just over $649bn.
Kuwait’s windfall abroad contrasts with its fiscal challenges at home, compounded by a standoff between members of the elected parliament and the government.
Kuwait’s government, which needs legislative authorisation to withdraw from the Future Generations Fund, submitted a draft law to parliament earlier this year seeking permission to tap as much as 5bn dinars ($16.6bn) from it a year to help finance a spiralling deficit.
The portfolio boosted its holdings of US assets when global markets plunged last year as the pandemic spread around the world, the person said. The fund invested in several of the most badly hit US indexes, the person said.
The recent gains follow a record 33% increase during the last fiscal year, Finance Minister Khalifa Hamada said on Thursday. Growth in the fund over the past five years has exceeded the country’s total revenue from oil for the same period, he said.
Kuwait recorded 66.7bn dinars in total oil revenue in the last five years. The fund also owns stakes in ports, airports and power distribution systems around the world.
Norway’s Government Pension Fund is the world’s biggest sovereign wealth fund with $1.3tn of assets, according to rankings by the SWF Institute, followed by the China Investment Corporation, which manages $1tn.