Kuwait sovereign fund says cutting U.S. investments, raising Europe

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News ID: 6493
Publish Date: 11:27 - 02 March 2015
ABU DHABI, March 2 (Reuters) - The Kuwait Investment Office (KIO), the London branch office of sovereign wealth fund Kuwait Investment Authority (KIA), is gradually reducing its overweight stance on U.S. assets after keeping that position for seven years, its chief executive said on Monday.
Osama al-Ayoub, speaking at a business conference in Abu Dhabi, also said the KIO was going overweight on Europe because of the European Central Bank's decision in January to use quantitative easing, a radical form of monetary stimulus.

"This year, we're starting after seven years of over weighting the U.S. market, we're starting to implement an overweight of European markets and gradually reducing our over weight to U.S. markets," he said.

"With all this liquidity (ECB president) Mr Draghi is trying to introduce, assets will inflate."The KIA is one of the world's largest sovereign wealth funds with about $548 billion under management, according to the Sovereign Wealth Fund Institute, which tracks the industry.

Ayoub also said the KIO believed the fall in oil prices might create opportunities to invest in oil services companies outside the Middle East and North Africa.

The KIO aims to double its assets under management over 10years which translates to an annual internal rate of return of7.3 percent, but this year will be "a very challenging year", he added.
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