Kuwait Fund Touts $150 Billion Profit as It Explains Areva Flop

(Bloomberg) -- Kuwait Investment Authority, the world's fourth-largest sovereign wealth fund, said it earned a net income of 45.2 billion dinars ($150 billion) in the last six fiscal years ending March 31, playing down the impact of losses resulting from its investment in French energy company Areva SA.

That the fund profited while invested in Areva reflects “how keen KIA is on diversifying its investments to make profits without being affected by losing in one investment,” state-run KUNA news agency reported, citing a statement from KIA. Concurrently, it announced the sale of its 4.8 percent stake in Areva, purchased in December 2010 for 600 million euro. The size of the loss was not disclosed.

KIA, which has been criticized by Kuwaiti lawmakers for the Areva losses, said it had been trying to sell the shares since 2014, after the nuclear disaster in Fukushima, Japan, led to a decline in investments in the industry.

The fund is planning to manage more of its own assets as it seeks to take more risk to boost returns, its former managing director, Bader Al-Saad, told Bloomberg in January. He said the fund was investing more in private assets and global infrastructure projects. Al-Saad has since been replaced by Farouk Bastaki.

KIA started as a Bank of England account dedicated to receiving oil money in 1953, according to its website. It manages Kuwait's General Reserve and Future Generations Fund, and has investments in areas including equities, bonds, real estate and infrastructure.

To contact the reporter on this story: Fiona MacDonald in Kuwait at fmacdonald4@bloomberg.net.

To contact the editors responsible for this story: Shaji Mathew at shajimathew@bloomberg.net, Amy Teibel, Michael Winfrey