London September 22 2022: The Kuwait Investment Authority is planning to reallocate management of a $7 billion loss-making fund to the Gulf state from the UK, months after it ousted the head of its London arm, people familiar with the matter said.
The satellite fund had a mandate to make concentrated bets on equities and represents a small portion of the wealth fund’s assets, the people said, asking not to be identified as the information isn’t public. The fund has attracted scrutiny because of recent heavy losses and the level of risk it takes, they said.
The KIA will now shift oversight of the fund to its headquarters in Kuwait from the London-based Kuwait Investment Office, they said, though the vehicle will remain housed in the UK.
Representatives for the KIA couldn’t immediately be reached for comment.
UK Chief’s Ouster Exposes Clash at $769 Billion Kuwait Fund
The KIA is the world’s oldest and one of the largest wealth funds. It manages the Future Generations Fund, a savings pot for life after oil, as well as the General Reserve Fund, or treasury.
It has stakes in ports, airports and power distribution systems around the world. The fund boosted its holdings of US assets when markets plunged in 2020, and the FGF reported returns of 33% for the year ended March 2021.
The KIA’s move in July to oust the head of its London arm, Saleh Al-Ateeqi, sent shock waves through the normally sedate world of Gulf sovereign funds. An investigative committee this week dismissed a complaint filed by Al-Ateeqi against the finance minister, after concluding there was no basis for the allegations.
Al-Ateeqi, who was hired in 2018 to modernize the KIO, was asked to leave without serving the standard three-month notice period. A former McKinsey & Co. partner, he increased its assets and hired executives including a chief investment officer, but is also said to have clashed with some long-tenured employees.
Hussain Al-Halabi has since been appointed to head the London branch as acting president and chief executive.