By Daniel Shane
Gulf state’s sovereign wealth fund recently failed in joint bid for UK water utility
Kuwait’s sovereign wealth fund will invest up to $5bn in British infrastructure assets over the next three to five years, it has been reported.
According to London’s The Financial Times, Kuwait Investment Authority (KIA) will seek to invest in existing projects in the country that are already creating cash flow.
“We are looking at brownfield projects because of the cash flow streams and to diversify our portfolio, as we don't think there is any money to make in fixed income, because of the zero interest rates,” KIA managing director Bader Al-Saad told the newspaper.
“Development is a different ball game, we are not developers. We are providers of long-term capital,” he added.
The fund’s investment plans for the UK come just weeks after a KIA-led consortium failed in its £5.3bn ($8bn) bid for water utility Severn Trent.
KIA has more than doubled its investment in Britain over the past 10 years to more than $24bn.
Kuwait's sovereign wealth fund, which manages state assets in the world's fourth-biggest oil exporter, is the oldest sovereign fund tracked by the SWF Institute with an estimated $342bn in assets, one of the world's largest.
"The KIA now manages more than $120bn globally compared with only $27bn 10 years ago," Saad said.
The KIA has around $9.24bn invested in equities according to Thomson Reuters data, with stakes in companies including BP, Vodafone and HSBC.