Page 69 - Aamir Rehman Gulf Capital and Islamic Finance The Rise of the New Global Players

CHAPTER 2 Entrusted Stewards 53

“GENERALIST” SOVEREIGN WEALTH FUNDS:
UNDERSTATED STEWARDS

The generalist sovereign wealth funds (SWFs) of the Gulf are the
region’s most prominent investors and, in many ways, its most
important. In the global SWF sector, Gulf institutions have been pio-
neers and today are leading players. According to estimates by the
Sovereign Wealth Fund Institute, Gulf institutions hold 41 percent of
global SWF assets, and three GCC sovereign funds are among the
world’s top seven SWFs by asset size (see Table 2.2).
Combined, the generalist SWFs listed in Table 2.2 are believed to
hold about $1.6 trillion in assets—two-fifths of the estimated global
total SWF asset base of $4 trillion. Remarkably, the Kuwait Investment
Authority (KIA) was established in 1953—more than 55 years ago and
far before the birth of most Kuwaitis alive today. The SWFs of the UAE
and Oman were founded in the wake of the oil booms of the 1970s,
whereas those of Qatar and Bahrain were formed in the boom of the
2000s. Saudi Arabia’s “SWF”—which is, in fact, an amalgamation of
preexisting holdings—was formalized in 1990, but its constituent parts
can be traced back further.

T ABLE 2.2
Gulf Sovereign Wealth Funds Are Leaders among Global SWFs 1

Global Rank Year of Estimated
(by Assets) Country SWF Name Establishment Assets 2
1 UAE Abu Dhabi Investment 1976 $875 billion
Authority (ADIA)
2 Saudi Saudi Arabian Monetary 1990 $425 billion
Arabia Agency (SAMA) Foreign
Holdings
7 Kuwait Kuwait Investment 1953 $200 billion
Authority (KIA)
14 Qatar Qatar Investment 2003 $60 billion
Authority (QIA)
27 Bahrain Mumtalakat Holding 2006 $14 billion
Company
33 Oman State General Reserve 1980 $8 billion
Fund (SGRF)

1
Sovereign Wealth Fund Institute, Global Fund Rankings, January 2009.
2
Rounded by author. We emphasize that these are merely estimates by the Sovereign Wealth Fund Institute.