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The RPU was initiated and staffed on 1 July, 2007. The RPU is responsible for evaluating the risk and performance of all of KIA's investments, including the Future Generations Fund (FGF) and the General Reserve Fund (GRF).  The Unit is required to make accurate and timely reporting to Senior Management. The Unit provides regular ad-hoc reports to the Senior Management, the Managing Director, the Executive Committee, and the Board that are clear, concise and with a level of detail appropriately tailored to the target audience. The RPU monitors the risk and performance activities relationship between KIA and the Kuwait Investment Office (KIO) in London, as well as outsourcing providers and third party data providers (Custodians, External Fund Managers and Investment Accounts), to ensure bottlenecks do not prevent timely production of reports. The RPU communicates and presents complex technical issues in a simple and presentable manner that is consistent with management's requirements and up to date on developments in the Risk and Performance field with regards to gathering data, calculation, analysis and reporting. The RPU adjusts to changes in the investment structure such as introduction of new mandates and participates in projects to enhance existing systems and practices, as well as develop new systems and methodologies to support KIA as it evolves, such as investing in new asset classes.

The RPU has following responsibilities:
  • Conducting performance and risk analysis.
  • Identifying and communicating performance and risk issues to senior management.
  • Developing an understanding of performance and risk within the KIA’s investment sectors.
  • Investigating data irregularities.
  • Educating KIA staff on performance and risk by explaining the Unit’s own work and answering questions as required.
  • Ensure the Unit’s output is clear and has explanatory detail as required to aid understanding.
The Managing Director periodically proposes the investment guidelines for various classes of assets for the Executive Committee, which review these guidelines. After due discussion, the Executive Committee approves the investment guidelines.
In the past, the KIA used to apply MSCI as a benchmark for measuring its performance. This was misleading since the MSCI was a pure equity benchmark while the FGF had various asset classes. In addition, the FGF's performance was measured against the performance of other large Pension Funds and Investment Agencies. This comparison, while being favorable for the FGF, was also not an accurate representation since the Target Returns and objectives of these organizations were inherently different from the FGF, which would give misleading comparative analysis. Accordingly, since 2004, the KIA has developed a KIA COMPOSITE INDEX which reflects the asset class weighting of the FGF and incorporates the benchmarks of those asset classes. This Composite Index was used to measure the FGF performance. Based on historical track record, this benchmark is the optimum for measuring the FGF's performance.