The Kuwait Investment Office (KIO) is the branch office of KIA in the City of London and manages funds on behalf of the State of Kuwait. It was set up in 1953 with the aim of investing surplus oil revenues to reduce the reliance of Kuwait on its finite oil resource.
The State of Kuwait transfers 10% of oil revenue into the Reserve for Future Generations each year, which is the overall responsibility KIA in Kuwait, the parent organization of the KIO.
The KIO manages its funds as a global investor, with investments in all main geographical areas and asset classes managed by portfolio managers on an active basis. It is a long term investor and the inhouse investment management team covers equities, fixed income, treasury, private equity and property. The KIO aims to produce superior performance relative to its benchmark and within specific risk parameters.
A diverse range of people work at the KIO, including Kuwaiti and non-Kuwaiti nationals, with a total staff of approximately one hundred.
The objectives of the KIO are:
To manage that portion of the Future Generation Fund of the State of Kuwait entrusted to the KIO, to maintain the real value of such funds and to achieve a fair return over the long term.
To regenerate the KIO and enhance its reputation as an expert and progressive institution investing in the international financial markets.
History of the KIO
1950 The KIO owes its existence to Sheikh Abdullah Al-Salem Al-Sabah, the ruler of Kuwait from 1950-1965, who decided that the oil revenue would be used for the people of Kuwait.
1953 The Kuwait Investment Board was established in 1953 with the aim of investing the surplus oil revenue in order to provide a fund for the future and reduce Kuwait's reliance on its single finite resource.
1961 Sheikh Abdullah steered his country through independence on 19th June 1961 and the funds built up enabled the creation of the welfare state from the oil revenues and the set up of new industries in Kuwait to develop the narrow economic base of Kuwait. The former Amir, Sheikh Jaber Al-Ahmad Al-Jaber Al-Sabah, as the Minister of Finance, established the basic investment principles for the fund, many of which are still in place.
1965 In 1965, the KIO replaced the Kuwait Investment Board with a total of 11 staff. In response to the upheavals in the world markets in the early 1970s, the KIO started to diversify its assets, and major portfolios were set up and substantial investments made.
1974 In 1974, it was decided that the KIO should adopt a long term view. In the same year, the KIO acquired St Martins Property Corporation and attracted publicity for the first time. The KIO, with its staff of 24 moved into its current location in 1975 – St Vedast House.
1976 In 1976, the Amir created the Reserve Fund for Future Generations, which was allocated 10% of State revenues annually. The KIO continued to manage its growing investments through the late 1970’s and early 1980’s and was often the subject of press speculation on the extent of funds under management.
1983 The KIO acquired Autobar in 1983, one of the largest hot and cold beverage and food vending enterprises in Europe that operates in the pan European market in vending and food services, distribution services and packaging/disposables.
1984 In 1984 the responsibility for the Reserve Funds was transferred to KIO. Its purpose is to oversee the investment and management of the GRF, the FGF and any other funds entrusted to it by the Minister of Finance.
1986 In 1986 statistics indicated that government revenue from investments exceeded revenue from oil.
1990 In August 1990, Iraq invaded Kuwait and the assets of Kuwait were frozen to protect it. During this time, KIO acted as a focus and a central bank for Kuwait during the occupation, and organized the transfer of funds throughout the world, and to the exiled Kuwaiti government in Saudi Arabia. Kuwait City was liberated on 26th February 1991. The KIO played a significant role in releasing funds for reconstruction.
1992 A new management structure for the office was adopted in 1992.
2003 2003 marked the 50th Anniversary of the KIO investing on behalf of the State of Kuwait.
2004 The KIO sold Autobar, one of its wholly owned companies, and its holdings in Guoco, in 2004.