Kuwait’s life-after-oil fund rises to record $700B

The Future Generations Fund is managed by the Kuwait Investment Authority and has over 50 percent of its investments in the United States.

Kuwait recorded 66.7 billion dinars or $221bn in total oil revenue in the last five years [File: Bloomberg]

Kuwait is making strides in an effort to invest its way out of dependency on oil money.

The Future Generations Fund, a national savings pot designed to help the country prepare for life after oil, has risen to about $700 billion, according to a person with knowledge of the matter. Its assets were valued at about $670 billion at the close of the last fiscal year on March 31, the person said, asking not to be named discussing confidential information.

The fund, which is managed by the Kuwait Investment Authority, has more than 50% of its investments in the U.S., 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 portfolio boosted its holdings of U.S. 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 U.S. indexes, the person said.

KIA officials couldn’t immediately be reached for comment.

The recent gains follow a record 33% increase during the last fiscal year, according to Finance Minister Khalifa Hamada 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 66.7 billion dinars ($221 billion) in total oil revenue in the last five years.

The KIA, which also manages the nation’s General Reserve Fund, is the world’s oldest sovereign fund and among the largest, with stakes in ports, airports and power distribution systems around the world. The Future Generations Fund can’t be touched without approval from parliament.

Norway’s Government Pension Fund is the world’s biggest sovereign wealth fund with $1.3 trillion of assets, according to rankings by the Sovereign Wealth Fund Institute. That’s followed by the China Investment Corporation, which manages $1 trillion, and the Abu Dhabi Investment Authority, known as ADIA, with $649 billion.

Source: Bloomberg