Kuwait Investment Authority, the sovereign wealth fund managing over US $1 trillion in assets, has divested a US $3.1 billion stake in Bank of America, according to sources familiar with the unregistered block trade. The shares were sold at US $47.95 each—at the bottom of Goldman Sachs’s marketed range—underscoring a strategic move to liquidate a long-held position.
The sale marks a notable shift from the fund’s crisis-era backing of Merrill Lynch. In January 2008, KIA invested US $2 billion in preferred shares of Merrill Lynch, later converting them into common stock. Bank of America’s acquisition of Merrill Lynch later that year created a lasting link between the fund and the bank.
Market reaction to the sell‑off was swift. Bank of America’s shares, which closed near US $48.66 before the trade, swung downward, falling more than 3% intraday, briefly trading around US $46.76. Analysts attributed the drop to both the volume of the block trade and the 1.5% discount applied. Goldman Sachs’ facilitation ensured execution without disrupting broader share prices.
KIA declined to comment on the transaction, consistent with its typical policy of silence regarding portfolio activity. This move follows a significant sale of its Asia-based AIA Group holdings worth US $3.4 billion, also executed through block trades earlier this month. Taken together, these moves indicate a broader reallocation strategy by the fund—away from large, stable institutions toward more liquid, growth-oriented assets.
The divestment may also reflect shifting risk assumptions. With global markets facing heightened volatility and rising geopolitical uncertainty, sovereign wealth funds are increasingly balancing portfolios with shorter-duration, agile investments. By exiting a legacy financial position, KIA has freed up capital for potential deployment in sectors such as private equity, technology, or climate infrastructure.
This repositioning is consistent with a trend among Gulf sovereign wealth funds, which are increasingly pivoting from traditional equity holdings into asset classes promising higher growth potential. The strategic emphasis now appears to focus on liquidity and nimbleness in capital deployment.
Bank of America, despite losing a significant institutional backer, remains supported by heavyweight shareholders including Berkshire Hathaway and Vanguard. Still, the exit of a crisis‑era investor adds a dimension of pressure amid an already challenging backdrop for US financials. Since the Federal Reserve began its current rate‑hiking cycle in 2022, Bank of America has underperformed its Wall Street peers—posting a return on investment of just 24%, the lowest among the six largest US banks.
Financial analysts now anticipate reassessments of Bank of America’s shareholder structure and potential shifts in strategic focus, such as adjustments to dividend policy or capital expenditure. The move also raises questions about whether other sovereign or institutional holders might follow suit.
Kuwait Investment Authority’s actions reflect its origin as the world’s oldest sovereign wealth fund—founded in 1953—and its evolution into a globally significant investor. With assets exceeding US $1 trillion, it stands as the fifth‑largest sovereign fund worldwide. Chairman Saad Al‑Barrak and Managing Director Ghanem Al‑Ghenaiman oversee a portfolio that is increasingly focused on future generations and sustainable yields.
Goldman Sachs remains the primary dealer for sovereign bloc trades, serving as a bridge between large institutional clients and capital markets. Its role in executing this sale illustrates how private placements can balance massive liquidity events with market stability, especially in blue‑chip assets like Bank of America.
