Kuwait puts money in funds, not bond market

The Kuwait Investment Authority is focused on private equity funds instead of bonds, said the head of Kuwait's sovereign wealth fund.

The Kuwait Investment Authority (KIA) is focused on private equity funds instead of bonds, Badr Al Saad, the head of Kuwait's sovereign wealth fund, said yesterday.

Mr Al Saad said that the KIA has been investing in private equity funds where the returns are good and is shunning bonds because interest rates are so low.

"We have been investing in private equity funds lately … the returns are good," he said in rare public comments about the KIA's investment strategy. He named Texas Pacific Group and CBC as two of the funds the KIA has been investing in.

He said the fund wanted to invest in upcoming infrastructure projects in Europe and the United States.

"We think that these countries need to develop their infrastructure. We think that investments in infrastructure will be big in the next five years," he said.

The decline of the Japanese yen could spark a currency war in South East Asia, he said. The Chinese economy will grow between 7.7 and 8 per cent over the next two years, far better than developed economies, Mr Al Saad, the managing director of KIA, told the pan-Arab network Al Arabiya at the World Economic Forum in Davos, Switzerland.

"The only fear is the decline of the yen. The decline of the yen could trigger a currency war in the countries of South East Asia, this is the only fear we have at the moment," he said.

The Japanese currency has weakened to about 90 per dollar from 80 since November on expectations the prime minister, Shinzo Abe, will force the central bank to ease monetary policy.

* Reuters