(Both Private Portfolios and Co-mingled Funds)
Indirect Investments - Fund
Funds must follow a Private Placement Memorandum (PPM) that meets industry best practices. Fund management team should prove to be dedicated, hold proper qualifications, and enjoy an sustainable record of performance. Fund capital size should not be less than KWD 50 million. Leverage on the Fund should not exceed fifty-percent of fund capital. KIA to ensure a minimum fund contribution of 5% in-fund (pari pasu). PPM to ensure clear and realistic Fund exit scenarios. Fund management to submit quarterly unaudited investors' reports followed by yearly audited reports. Ensure that KIA has a maximum contribution of fifty percent of fund capital at closing. Ensure that KIA has the right to liquidate pro-rata should contribution exceed fifty percent of NAV at any time. Ensure that KIA has a minimum of one seat on Fund Advisory Council.
Indirect Investments - Fund Managers
Indirect investments must be through regulated banks, financial institutions or real estate companies with a good reputation, with high efficiency. The institution's bylaws should allow the creation and management of real estate funds. The institution must have an active internal audit department, a clear separation between propriety and client assets and international standard corporate governance. The institution must have related support departments (research, legal, operations, others), an experienced technical team either in-house or outsourced and an encouraging record of accomplishment.
Indirect Investments - Portfolio Manager
The Portfolio Manager must be a regulated bank, financial institution or a real estate company with a good reputation, with high efficiency. The institution's by-laws should allow third party asset management. The institution must have an effective internal audit department, a clear separation between propriety and client assets and international standard corporate governance. The institution must have a solid management team with proper qualifications and an encouraging record of accomplishment. The Asset Manager should have recorded profits in last two out of three years. The Institution must have related support departments (research, legal, operations...others) and an experienced technical team either in-house or outsourced. Assets under management should be greater than KWD 30 million. The Asset Manager should have an actual presence in targeted investment geographies.
Indirect Investments – Portfolios
These investments are allowed a maximum leverage of fifty percent per investment. These investments require submission of quarterly unaudited investors' reports, followed by yearly audited reports to KIA. The Portfolio Manager must establish an SPV for each asset (where possible) and manage these SPVs to limit liability to KIA. Investment decisions must be taken by an investment committee from the portfolio executive team, which are to be in line with portfolio strategy. The maximum single asset exposure allowed is twenty percent of total portfolio size. To avoid conflict of interest, no related party transactions are allowed without prior written approval of KIA.
A due diligence report must be prepared according to industry best practice, including all information needed to make a supported investment decision. The single asset maximum exposure allowed is five percent of the total Real Estate Portfolio. The minimum investment size allowed is KWD 25 million. Whenever possible, a SPV must be set to house the asset. The investment must have a clear and realistic asset exit scenario. The Property Manager is required to provide quarterly unaudited investors reports followed by yearly audited reports.