AKIPRESS.COM - KKR & Co. founder Henry Kravis, Blackstone Group LP Chairman Stephen Schwarzman and Carlyle Group co-founder David Rubenstein were among the guests when Kazakhstan President Nursultan Nazarbayev hosted a dinner in New York, reports Bloomberg. 

Apart from the dining at the Four Seasons Hotel, there was access to a possible $93 billion on the table as Nazarbayev, who presides over Central Asia’s biggest energy exporter, seeks to boost returns on the country’s wealth funds. The $64 billion National Fund has struggled to achieve an average of 2 percent annually for the past five years.

After President Nazarbayev, who spoke about investment opportunities in Kazakhstan and institutional reforms the nation embarked on this year, speakers from the U.S. including former Federal Reserve Chairman Ben Bernanke took the floor to talk about global geopolitical and economic challenges.

As the price of oil flirts with an 11-year low and returns from commodities slump to levels last seen in 1999, new inflows into the $7.1 trillion of assets controlled by the world’s sovereign wealth funds from Kazakhstan to South Korea are in jeopardy. Norway’s $840 billion fund posted its biggest loss in four years in the second quarter as global markets were roiled by a selloff in Chinese stocks and the prospect of higher U.S. interest rates.

“We are sitting on a huge pile of cash and not making real returns,” said Berik Otemurat, who organized the September dinner and who helps manage $800 million of the Kazakh Central Bank’s reserves as chief executive officer of National Investment Corp. “It’s especially urgent to address this, given the gloomy outlook for oil prices and reduced inflows into the National Fund.”

Kazakhstan now plans to increase investments in real estate, private equity and hedge funds as it seeks to boost returns. Facing a similar predicament, Arabian Gulf funds are switching their investments out of financial services and into hotels and retail, as well as funding infrastructure in Africa, where yields are higher, Moody’s Investors Service said in a Nov. 12 report.
Some funds are also liquidating assets as oil revenue shrinks, according to Richard Buxton, chief executive officer of Old Mutual Global Investors in London.