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Kuwait opens wealth fund office in Saudi Arabia

Anwar al-Mudhaf, chairman of the Kuwait Investment Authority, said Saudi Arabia is 'witnessing a notable rise in its investment importance' Wam
Anwar al-Mudhaf, chairman of the Kuwait Investment Authority, said Saudi Arabia is 'witnessing a notable rise in its investment importance'
  • Saudi Arabia ‘rising in investment importance’
  • Saudi delegation visited Doha in May
  • PIF seeks to plug $1.25trn gap

Kuwait’s sovereign wealth fund is to open an office in Saudi Arabia, as the kingdom turns to its Gulf neighbours to shore up flagging foreign investment in its giga-projects. 

Anwar al-Mudhaf, chairman of the Kuwait Investment Authority and Kuwait’s finance minister, praised Saudi Arabia as an investment location and as a key player in the world economy.

Saudi Arabia is “witnessing a notable rise in its investment importance and growing role in international economic decisions”, al-Mudhaf said, according to Kuwait’s official news agency, Kuna. 

The decision comes after a Saudi business delegation visited Doha in May to encourage investment in industry and mining, and major investment banks such as Edmond de Rothschild announced the opening of offices in Riyadh. 

Saudi Arabia’s Public Investment Fund (PIF) is looking for funding options to plug gaps in its $1.25 trillion economic transformation programme that have caused delays in some projects and brought speculation that some could be cancelled

The Saudi government is facing three years of budget deficits because oil prices lag below a breakeven price of around $96 per barrel, and foreign direct investment inflows are still far short of a target of $100 billion a year by 2030. 

In other efforts to find funding sources, Saudi Arabia has raised $17 billion in debt markets this year, PIF saved at least $15 billion by divesting from US equities, and the government doubled PIF’s stake in the state oil giant Aramco to 16 percent. 

In May, Qatar’s prime minister, Mohammed bin Abdulrahman Al-Thani, called on Gulf countries to do more to unify their economic growth plans to face rising geopolitical risks. 

The New York-based sovereign wealth fund analyst Global SWF found that PIF has $925 billion in assets under management in June 2024, while KIA has $846 billion. Within the Gulf Cooperation Council (GCC) countries, Abu Dhabi’s ADIA has $968 billion and Qatar’s QIA $510 billion. 

A member of Neom’s advisory board, Ali Shihabi, said on X (formerly Twitter): “FDI coming from GCC [sovereign wealth] funds is expected to play an ever increasing role in the Saudi economy going forward.” 

Tim Callen, a former International Monetary Fund official and visiting fellow at the Arab Gulf States Institute in Washington, said it was a sign that Saudi FDI would pick up. 

“Tapping other regional sources of capital makes sense for the Saudis, although it doesn’t really help Kuwait or Qatar in terms of their own diversification objectives,” he said.

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