A report issued by the “Global SWF” platform stated that the Kuwait Investment Authority is the sixth largest government investor in the world, with assets under management amounting to $769 billion in 2022 while it scored 48 percent out of 100 in the governance, flexibility and sustainability rating.
At the country level, Kuwait ranked 11th in terms of the volume of government investment, with assets under management amounting to $909 billion, reports a local Arabic daily.
While it expected that the value of the assets under management of the Kuwait Investment Authority would reach $1.048 trillion in 2030, the platform specialized in collecting data on sovereign wealth funds indicated that the developments in Kuwait are worrisome in terms of governance and stability.
The report pointed out that the position and momentum of sovereign wealth funds in the Middle East, especially in the Gulf region, is much better than others due to the average oil price of $99 per barrel and the peg of their currencies to the dollar.
For the Gulf economies with lower fiscal spending, the report explained, this translates into large surpluses, which were transferred to some sovereign wealth funds at the end of the year.
Therefore, the large, more liquid, internationally focused savings funds, including the Abu Dhabi Investment Authority, the Kuwait Investment Authority and the Qatar Investment Authority, are set to receive large inflows of capital.
In the context of its talk about developments affecting sovereign wealth funds during the year 2022, the report stated that the largest reform took place in Kuwait, where the government change in July accelerated changes in the state apparatus in the country.
On the other hand, the report revealed that the KIA reduced its investment portfolio in Indian stocks by 25 percent in 2022, and also reduced its investment in Chinese stocks by 22 percent.
The report explained that the largest deal carried out by the KIA was the acquisition of the American (Direct Chassis Inc) group, in partnership with (GIC) and (OMERS), a deal worth $1.5 billion.
The value of the KIA portfolio locally, that is, its investment in local assets and securities, will have reached 10 percent in 2022, and it is considered a flexible sovereign wealth fund.
The Investment Authority ranked 11th in the world among the largest government investors in the world in fixed income with an investment of $212 billion, seventh in the world in investing in stocks with an investment of $376 billion, 11th in real estate with an investment of $38.3 billion, and 16th in infrastructure with an investment of $38.3 billion. 31 billion, and 6th in private equity with an investment of 65 billion, 27th in venture capital with an investment of $1 billion, and fourth in hedge funds with an investment of $30.7 billion.
The Global SWF estimates showed that the heavy losses incurred by the stock and bond markets during the past year led to a decrease in the combined value of sovereign wealth funds and public pension funds around the world for the first time ever, by about $ 2.2 trillion.
The report stated that the value of assets managed by sovereign wealth funds fell to $10.6 trillion, while the value of public pension fund assets fell to $20.8 trillion.
Diego Lopez of Global SWF explained that the main driver was “simultaneous and large” corrections of 10 percent and more in the major bond and stock markets, a combination that has not happened in 50 years.
The report expected that Gulf sovereign funds such as the Abu Dhabi Investment Authority, Mubadala, the Holding Company (ADQ), the Public Investment Fund and the Qatar Investment Authority would become more active in buying Western companies after receiving huge financial inflows from oil revenues during the past year.
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