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Wednesday , August 10 2022

KIA seeks to up investments; Capital markets targeted

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KUWAIT CITY, March 20: The London branch of the Kuwait Investment Authority (KIA) has appointed executives from Barclays plc and the Carlyle Group in recent months, as Kuwait is working on increasing the investment of sovereign wealth fund in capital markets, reports Al-Rai daily. Sources revealed to Bloomberg Agency that the Kuwait Investment Authority appointed Arne Hassell as the Chief Investment Officer in November. Hassell previously worked as the head of the information department at Barclays and head of hedge fund strategies for Europe and Asia at Goldman Sachs Group. Bram Verster, a former principal at Carlyle, has been appointed as chief strategy officer. Ian Edwards of Jupiter Asset Management has joined as the new chief technology officer.

The sources explained that the Kuwait Investment Authority has been increasingly active in recent years in the capital markets with a focus on IPOs and pre-IPO opportunities. It has also been an active investor in the real estate markets, supporting a major project in Boston. The London office has about 100 employees, and the fund is looking to attract more cadres. Meanwhile, local sources revealed that officials of the Kuwait Investment Authority (KIA) have asked their counterparts in the Public Authority for Housing Welfare (PAHW) to reconsider the planned housing plan, justifying their position on the lack of sufficient financial resources to finance the announced housing expansion.

The sources explained that KIA, in an effort to preserve the quality of the general reserve as much as possible, informed PAHW that it should not rely on it to provide the necessary liquidity to cover all its scheduled housing movements, and that it should search for other alternatives, if it decides to move forward with its plans. Even with the increase in the capital of the Kuwait Credit Bank, as scheduled, by KD 800 million, the general reserve will not be able to implement the plan of PAHW.

According to the data, the size of the planned projects is estimated at about USD 17.3 billion, including a project to build and distribute housing units in Saad Al-Abdullah City at an estimated cost of about USD 4 billion. It also includes projects in different stages such as studying, offering contracts and awarding them, or designing and implementing in the construction sector. PAHW has also launched efforts to implement several housing projects that it had previously planned. According to the available data, it is executing 33 contracts in 8 residential cities at a total value of approximately KD 903 million.

The sources stressed that KIA’s move is also considered as a warning to PAHW to not enter into contracts to implement its upcoming projects and then stumble in the future with the lack of sufficient financial resources to cover its obligations, and thus fail to settle the due payments. They said, “The level of liquidity available in the general reserve has improved in the recent period, driven by the rise recorded in oil prices. It has reached record levels that have not been recorded for years. However, this does not mean the end of the deficit stage, and the increase in the financing capacity of the state. PAHW was invited to rearrange its plan in a way that is actually consistent with the reality of the general reserve.”

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