Innovation in Private Markets 3:  Sulaiman Alderbas – A Massive Restart at PIFSS (Capital Allocators, EP.194)

Demographics

Sulaiman Alderbas, Head of Alternative Investments at Kuwait’s PIFSS, highlights the demographic advantages of Kuwait in shaping investment strategies. With a young population, PIFSS can afford to invest aggressively in private markets, taking long-term views without sudden liquidity needs. This demographic profile allows for innovative strategies, such as co-investment efforts and strategic partnerships, to expand opportunities and manage risks effectively 1.

The last three years for us were about taking risk, and the next three years for us are about being honest with ourselves and taking smart risk.

Alderbas emphasizes the importance of adapting strategies based on past experiences, such as during the COVID-19 pandemic, to optimize future investments.

   

Co-Investments

Strategic co-investments and partnerships are central to PIFSS's approach, leveraging market opportunities through collaboration. Sulaiman Alderbas describes the growth of their strategic book, which increased from 6% to 14% of NAV, driven by relationships with firms like Wafra and Stonepoint 2. These partnerships aim to create synergies and strategic cooperation between Kuwait and international investors.

We have to change our approach and realize that there, it's a beta market, it's a volatile market, and it would only make sense on a net basis to do it through a market neutral approach.

Alderbas stresses the importance of flexibility and adapting strategies to different markets, such as adopting a market-neutral approach in Asia 3.

   

Fund Strategies

Innovations in fund strategies at PIFSS involve purposeful investment allocations and evolving roles of hedge funds. Sulaiman Alderbas explains the shift from traditional fund of funds to SMAs and SMEs with leading alternative asset managers, enhancing transparency and access to research 4. This approach allows PIFSS to manage risks and ensure each investment serves a clear purpose.

The key is both a combination of diversification and concentration, and creating this anchor approach and satellites around it to create an all-weather program.

Alderbas highlights the importance of understanding underlying exposures and balancing diversification with concentration to achieve consistent returns 5.