Buoyed by inflows of petrodollars and cheap credit, Kuwait’s finance houses have been aggressive investors in regional and international markets in the past decade, snapping up trophy assets in everything from luxury car brand Aston Martin to property and stocks.
But the financial crisis has starkly exposed a toxic mismatch between short-term loans and often illiquid assets whilst also highlighting a reliance on paper investment gains rather than asset management or brokerage fees, or recurring revenue from portfolio companies.
The sector’s woes are not new. Problems first emerged towards the end of 2008 and two of the largest finance houses are now tentatively emerging from restructuring after defaulting in the wake of the collapse of Lehman Brothers.
Investments made by the emirate
● Aston Martin (UK luxury sports cars) – Investment Dar (almost 50 per cent).
● Halcore Group (US ambulance maker) – Gulf Investment House.
● Stronghaven Inc (US corrugated packaging maker) – Gulf Investment House.
● Orbit Showtime (Middle East pay-TV service) – Kuwait Projects Company.
● Meezan Bank (Pakistan) – Noor Financial Investment Company (45 per cent).
● Asian Finance Bank(Malaysia) – Global Investment House.
● Courts Mammoth(furniture/electricals in Malaysia and Singapore) – The International Investor (about 50 per cent in both Malaysia and Singapore).
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