Kuwait Investment Company (KIC) is a public shareholding company, incorporated under the laws of the State of Kuwait on 25 November 1961 and listed on the Kuwait Stock Exchange. The company has been a leading player in the investment industry in Kuwait and the GCC over its 50 years of operation, passing through numerous economic cycles and lasting through a host of crises.
For example, the 1982 Al-Manakh crisis brought the national economy to a standstill and helped to push the whole region into recession; while the 1990 Iraqi invasion had a similarly disastrous and long-term effect. Despite these local seismic economic shifts – and global trends such as the 2007 crisis – KIC’s sustainable management and innovative strategies have ensured its position as a sustainable leader in the investment sector.
High diversification
KIC’s processes and focus on training have been key to its success – not least of which has been the company’s ability to strategically restructure and rehabilitate itself to cope with the continuously changing and developing national economy.
The company has ensured that its performance and profits are market-proof, relying on real profits that result from operations and effective performance, as opposed to speculations and market fluctuations. This means variations in stock prices and market volatility do not affect the company’s performance or rating.
This is accomplished through the sheer power of diversification. KIC carries out a wide range of investment and financial activities, providing a diversified package of local and international investment and financial products to a local and international customer base.
KIC introduces this unique blend of best-in-class financial and investment products and services via a specialist network of cross-discipline professionals. These highly skilled and motivated teams are committed to building on the company’s historic success – by producing the best investment suite in the region and therefore the best operating results for the company’s shareholders and customers.
The company has focused its activities in the past year on restructuring its investment portfolio and developing an appropriate strategy to cope with the changing market. Under its new ‘training, rehabilitation and development‘ framework, the company is geared up to take advantage of the global economic instability while looking for safe global investment opportunities. This strategy has given KIC a remarkable flexibility, readiness to market and the acumen to nimbly adapt to any situation.
Institutional recognition
It was this strategy and KIC’s long term leadership position in the investment sector that caused Capital Standards Credit Rating to award KIC a long-term rating of BBB and a regional rating of Akw. This in addition to Moody’s Credit Rating Agency awarding KIC BAA3, reflecting the company’s credit worthiness relative to its peers and competitors.
As of 31 December 2010, the company’s total assets were valued at KD 257m ($771m) and its net assets stood at KD 119m ($357m). The company’s total assets under management were a substantial KD 2.518bn ($7.55bn).
The funds managed by KIC both locally and internationally have consistently achieved positive results and beaten market performance. During 2010, for its local funds and portfolios, KIC’s investment strategy yielded results outperforming most other funds and the market in general.
All KIC’s funds performed exceedingly well, with many surpassing the performance of the index of the Kuwait Stock Exchange. This was largely due to the proprietary formula – based on price momentum and earnings – that was adopted by KIC, and which has yielded many rich dividends and outperformed the market.
The Al-Raed Fund, for instance, achieved 14.88 percent, and the Al-Atheer Telecommunication Fund beat most Arab markets in the region, at 11.50 percent. As for KIC’s international funds, the Global Bond Fund achieved a return of 6.20 percent, while the Pacific Equity Fund aggregated a return of 17.78 percent. The Diversified Fund posted net returns of 9.95 percent, the North American Equity Fund yielded returns of 12.66 percent, and the European Equity Fund gave a return of 10.30 percent. As a group, all of KIC’s funds were rated above average and generated above average returns for the period in question.
Following the global financial crisis, KIC implemented a large-scale operation to renew the organisational structure of the company, restructuring the workforce to enhance its performance. This new strategy focuses on harvesting the strength of the company to achieve enduring success.
Enabling sustainability
KIC has been one of the pioneers in the industry, establishing a risk management office to help create a culture of sustainability. The risk management office was set up primarily to enable the company to sustain its performance, manage growth, and shield the company from risks in the economy. KIC aims to focus on growth by managing risk prudently and thus provide value to its shareholders and clients.
Another striking feature of KIC’s success is its CSR activity. This has been one of the company’s main focus areas throughout its 50 years of operation. The company carries out its CSR activities through a multichannel, multipronged approach. At a national level, it caters to the funding needs of societies such as the Kuwait Handicap Society and several hospitals; while at an international level it extends financial aid in response to natural disasters, such as the flooding in Pakistan. KIC dedicates $150,000 annually to CSR-related activities.
Receiving the World Finance award for Best GCC Fund Management Company 2011, a spokesperson for KIC said, “None of the company’s achievements would have been possible without the trust and steadfastness that its clients and shareholders have bestowed upon it. We would therefore like to express our gratitude to our board of directors for their guidance, our shareholders for their continued trust and complete confidence in us, our customers for their support and loyalty, and our employees for their dedication and tireless efforts in making us what we are – not only in Kuwait but in the whole region.”
For more information: www.kic.com.kw
