DEFINITION of Kazakhstan National Fund
The Kazakhstan National Fund is a sovereign wealth fund for the nation of Kazakhstan. The sovereign wealth fund originates from surplus revenues gained from taxes on the development of oil, gas and mineral reserves. According to the Sovereign Wealth Fund Institute, the Kazakhstan National Fund had approximately $57 billion in assets as of 2018.
BREAKING DOWN Kazakhstan National Fund
The Kazakhstan National Fund was established in 2000, primarily to act as a stabilization fund to lessen the impact that volatility in oil, gas, and mineral prices have on the Republic of Kazakhstan. The Kazakhstan National Fund is a secretive organization, and little information can be found as to its governance, holdings or investment strategies. The Kazakhstan National Bank lists assets for the fund at $59.2 billion as of March 2018. Some $13.1 billion of that total was in gold. The fund has no website and issues no public reports on its activities.
Fund's Assets Frozen
In October 2017, Bank of New York Mellon, following a Belgian court order, froze $22.6 billion in assets held by Kazakhstan’s National Fund as part of a legal battle between the government and a Moldovan investor. Reuters reported that the freeze was connected to "a years-long legal row between businessman Stati, his son Gabriel, two family-controlled companies and the Kazakh government of President Nursultan Nazarbayev. They invested in Kazakhstan’s oil and gas industry and had asserted that they were subjected to significant harassment from the state aimed at forcing them to sell their investments cheaply."
In January, a Dutch court overturned the freeze, the Kazakhstan information ministry reported. "On January 23, 2018, the District Court of Amsterdam granted the request of the National Bank of the Republic of Kazakhstan to remove the arrest from the assets of the National Fund that are a custodian in Bank of New York Mellon. The court agreed with the position of the National Bank and the Ministry of Justice of the Republic of Kazakhstan, who participated in the process as a third party, and ruled that the assets of the National Fund are inviolable. The Dutch courts had previously denied Stati the imposition of the seizure of the same assets. Stati concealed these facts, thereby misleading the court."
At stake in this court, disputes are whether sovereign wealth funds are investment arms of governments or independent institutional investors. These funds, of which Norway's is the largest at over $1 trillion, hold more than $7 trillion worth of wealth spread all over the globe.