On the trail of the world’s oldest—and most elusive—sovereign wealth fund.

“The Kuwait Investment Authority [KIA] has always been a black box. No one knows what goes in, what comes out, and what is going on inside. But it was here before everyone else; it is still here—and it is growing.”

I am on the 30th floor of one of the skyscrapers in Kuwait’s capital city which was constructed—painstakingly slowly—during the financial crisis. I am talking to a senior financier who deals with the small state’s largest national wealth fund. We are drinking sweet tea and overlooking the Arabian Gulf. He, like the others I have arranged to meet, has agreed to tell me what he knows about the KIA’s activity on the strict understanding that his identity will not be revealed.

“Many people work with the KIA: It is a huge investor in a very small country. But it is also a government agency and thus avoids any kind of publicity,” he says. “In Kuwait it takes years to build up a relationship, but it can be ruined in an instant—and no one wants that.”

This is how the fund has managed to stay under the radar since its inception more than 60 years ago, despite being one of the largest asset pools on the planet and making multimillion-dollar international investments. And this is why I have come to Kuwait: to find out how it allocates capital, deals with partners—and what it is planning for the future.


It all began in London in 1953. An account at the Bank of England, created by Kuwait’s emir to collect oil revenues, was transformed into a standalone agency: the Kuwait Investment Board. Four trustees were appointed—including two Bank of England directors—to ensure the prudent investment of these reserves. That such high-ranking officers were responsible is indicative of the size it had already achieved. Back in 1946, Kuwait made its first exports of crude oil, and for several decades it was the largest producer of black gold in the Gulf region.

Today, there are very few people who know the exact value of assets managed by the KIA. Estimates in the press put it around $350 billion, but those closer to the inner workings put it much higher.

“I would say it is closer to $425 billion,” says one Gulf-based financier. “It’s a lot bigger than most people think, and the KIA is not about to start correcting people. Why would they?”

After the state gained independence from the UK in 1961, the London-based investment board was renamed the Kuwait Investment Office (KIO) and given specific responsibility to manage what became known as the Future Generation Fund. Since 1976, 10% of the country’s annual income has been allocated to the fund, which came into its own after Saddam Hussein’s invasion, and subsequent liberation, in 1990. Rebuilding the country cost more than $85 billion, according to official figures. The Future Generation Fund paid the bill.

But there is more to the KIA than one account. The General Reserve Fund is also a sizeable pot of capital, but put to work in a different manner, its partners say. It serves as a slush fund in case the government goes over budget in any given year—but has not been touched for decades. Indeed, such is Kuwait’s overwhelming oil revenue that as part of the 60-year celebration of the KIA, the country invested 25% of its entire annual income into the Future Generation Fund.

“It’s our rainy day fund,” says one Kuwaiti financier. “We don’t need it yet, but we have needed it in the past and it is likely we will need it again.”

They will need it when oil and other fossil fuels finally run out. So the KIA investment team are making hay while the immensely hot sun shines. “As an investor, it looks and feels like an endowment,” says one KIA partner. “It has liabilities to meet, but there is still plenty of cash flow and the liabilities are decades away.”