Kuwait Pension Fund Plans To Triple Infrastructure Investments

Kuwait’s $112 billion pension fund is looking to more than triple investments in infrastructure as part of its asset-allocation strategy over the next couple of years.

“In infrastructure, we’re looking to build up aggressively,” Meshal Al-Othman, director general of the Public Institution for Social Security, said in an interview with Bloomberg TV on Tuesday. “We’re at 3% today. We’re taking that up to roughly 10%.”

It will also “slightly increase” investments in hedge funds and real estate, he said.

Al-Othman is part of a new management team brought in during 2017 to transform the state-owned institution after a corruption scandal involving a previous manager. The fund has since exited more than $20 billion in questionable deals in a major reorganization of its portfolio.

PIFSS, as the fund is known, had a record investment profit of $7.3 billion in the three months through June, an almost fourfold increase from a year earlier. It aims to have 12% to 17% of its portfolio in real estate, followed by private equity at between 8% and 13%.

The team inherited a portfolio with a “humongous” 40% sitting in cash, Al-Othman said. This is now at 11.5% of its investments, which the fund aims to reduce to 4% by March.