Kuwait pension fund plans to triple infrastructure investments

Kuwait’s $112bn 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 (PIFSS), said in an interview with Bloomberg TV on Tuesday. “We’re at 3 per cent today. We’re taking that up to roughly 10 per cent.”

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 $20bn in questionable deals in a major reorganisation of its portfolio.

PIFSS, as the fund is known, had a record investment profit of $7.3bn in the three months through June, an almost fourfold increase from a year earlier.

It aims to have 12-17 per cent of its portfolio in real estate, followed by private equity at between 8-13 per cent.

The team inherited a portfolio with a “humongous” 40 per cent sitting in cash, Al-Othman said.

This is now at 11.5 per cent of its investments, which the fund aims to reduce to 4 per cent by March.