Kuwaiti Sovereign Wealth Fund was among four other sovereign funds in the Gulf Cooperation Council countries and made the top 10 investment funds in the world with assets estimated at $7.4 trillion.
Al-Anba quoting a report stated after the establishment of the Kuwait Investment Office in London in 1953 as the first Sovereign Wealth Fund, the global trend to establish sovereign funds began in the 1950s, as these funds allow countries to invest in various entities to achieve the desired profits and help stabilize the economy through diversification of assets into bonds, stocks and other investments.
The report added that the Norwegian Sovereign Wealth Fund, managed by the Central Bank of Norway, has assets of 1.33 trillion dollars and ranks first in the world, followed by the fund of the Chinese Investment Company with assets of 1.222 trillion dollars. These two funds are the only ones whose assets exceed the trillion-dollar barrier among the funds. The other sovereign that made it to the list of the largest funds is the Kuwait Sovereign Wealth Fund of the Kuwait Investment Authority, as well as the funds affiliated with the Abu Dhabi Investment Authority, the Investment Corporation of Dubai, the Singapore Government Investment Corporation, the Saudi Public Investment Fund and the Qatar Investment Authority.
The report said that the world’s 10 largest sovereign wealth funds, including major funds from the Gulf Cooperation Council countries, manage assets worth $7.4 trillion out of the total assets of $9.56 trillion owned by 100 sovereign wealth funds around the world.
The report pointed out that the past few years have witnessed an increase in the assets managed by sovereign funds while more of these funds continue to appear every day, and we can also expect the total assets under management to increase globally.
However, what is interesting is the recent trend of these sovereign funds to pour their money into alternative investments such as real estate, infrastructure, private equity, and hedge funds, even as more sovereign funds are exploring investment opportunities outside the realm of stocks and shares, it seems that the Norway fund is not going in This trend, as the share of alternative investments in its portfolio does not exceed 3% of its total assets as in 2021, while the fund’s assets were distributed among stocks, fixed income, real estate, and renewable energy infrastructure, with the first two obtaining the largest share.
Norway’s sovereign wealth fund generated a 1.58 trillion crowns ($177 billion) return on investment last year, backed by technology stocks. The largest sovereign wealth fund in the world recorded a return of 14.5% in 2021 making it the second-highest return in its history, after achieving 1.69 trillion crowns in 2019.
“The good results are mainly due to the strong performance in the stock market throughout the year,” Nikolai Tagin, the fund’s executive director, said in a statement. He added, “There was a good return in all sectors, but investing in technology and financial companies did particularly well.”