DEFINITION of 'Kuwait Investment Authority'

The Kuwait Investment Authority (KIA) is a government-owned corporation responsible for managing the sovereign wealth fund of Kuwait. The KIA was initially created in 1953 to create a fund for future use and lessen the country's dependence on its oil reserves. The source of the money for the sovereign wealth fund is derived primarily from the excess proceeds from Kuwait's oil reserves.

BREAKING DOWN 'Kuwait Investment Authority'

The Kuwait Sovereign Authority (KIA) manages the world’s oldest sovereign wealth fund. The Kuwait Investment Board was created in 1953 by Sheikh Abdullah Al-Salem Al-Sabah, eight years before the country’s independence in 1961. The Kuwait Investment Authority was created in 1982 as an autonomous government body in charge of managing the assets of the country. It is located in Kuwait City, Kuwait, with additional offices in London, England and Beijing, China.

The KIA invests mostly in private and public equity, real estate, fixed income and alternative investment markets. The fund is divided into the General Reserve Fund and the Future Generations Fund. According to the Sovereign Wealth Fund Institute, the Kuwait Investment Authority controls the seventh-largest sovereign wealth fund in the world.

The General Reserve Fund (GRF)

Kuwait’s GRF is the primary repository of the country’s oil revenues and income earned from the fund’s investments. Its assets and income are open to use by the State of Kuwait as determined by the government. Ten percent of all state revenues and 10 percent of the GRF’s net income are transferred to the Future Generations Fund. The GRF invests in companies in Kuwait and other MENA (Middle East and North Africa) countries.

The Future Generations Fund (FGF)

The FGF is considered an intergenerational, long-term saving platform. It was created in 1976 with a 50% transfer from the GRF. The fund invests outside of Kuwait with strategic asset allocation. All income from FGF’s investments are reinvested and any transfers from the fund require a specific legislation.

  1. Sovereign Fund Of Brazil

    The Sovereign Fund of Brazil is a sovereign wealth fund for the ...
  2. SAFE Investment Company (China)

    The SAFE Investment Company is the Hong Kong branch of the Chinese ...
  3. KWD (Kuwaiti Dinar)

    KWD (Kuwaiti Dinar) is the national currency of State of Kuwait. ...
  4. Sovereign Credit Rating

    A sovereign credit rating gives investors insight into the level ...
  5. Sovereign Debt

    Sovereign debt is issued by the national government in a foreign ...
  6. Oman Investment Fund

    A state-owned investment fund established in 2006 by the Sultan ...
Related Articles
  1. Investing

    An Introduction To Sovereign Wealth Funds

    Countries use sovereign wealth funds to stabilize their economies, but these investments can lack transparency.
  2. Investing

    The Risks Of Sovereign Bonds

    Sovereign debt can play an important role in providing international diversification to individual investors.
  3. Investing

    Can OPEC Live with $60 Oil?

    Saudi Arabia sees $60 per barrel oil as the magic number that maximizes revenue without triggering a U.S. shale oil boom.
  4. Insights

    Moody's Sovereign Debt Outlook Worst Since 2012

    More sovereign debt issuers have negative outlooks than at any time since the European sovereign debt crisis.
  5. Trading

    Iraqi Dinar: Can Comparables Guide Investment?

    Is the Iraqi dinar a good investment? Compared to the Kuwaiti dinar, the Vietnamese dong, and the Egyptian pound, it doesn't stack up.
  6. Investing

    10 Countries With The Cheapest Gas At The Pump

    Does your wallet whimper when you stop to put gas in your car? It turns out that your pain is not felt everywhere.
  7. Insights

    How Countries Deal With Debt

    For many emerging economies, issuing sovereign debt is the only way to raise funds, but things can go sour quickly.
  8. Investing

    3 Frontier Market Funds You Should Consider Investing!

    Discover what frontier markets are and and learn about three funds that are worth your while, even though they have high expense ratios.
  9. Financial Advisor

    3 Morgan Stanley Funds Rated 5 Stars by Morningstar

    Discover the three best mutual funds administered and managed by Morgan Stanley that received five-star overall ratings from Morningstar.
  10. Investing

    Meet Your Investment Objectives With Income Funds

    Discover the categories of income funds and the types of investors for whom they are appropriate.
  1. Mutual funds versus money market funds

    Learn what mutual funds and money market funds are and understand the differences between each, as well as how they serve ... Read Answer >>
Trading Center