What Is the Kazakhstan National Fund?

Understanding the Kazakhstan National Fund

The Kazakhstan National Fund is financed from surplus revenues gained from taxes on the development of oil, gas and mineral reserves. The  lists assets for the fund at $59.8 billion as of January 2021. Some $123.6 billion of that total was in gold. The fund has no website and issues no public reports on its activities. The Kazakhstan National Fund is a secretive organization, and little information can be found as to its governance, holdings or investment strategies.

Kazakhstan National Fund's Assets Frozen

In October 2017, Bank of New York Mellon (BNY), following a Belgian court order, froze $22.6 billion in assets held by Kazakhstan’s National Fund as part of a legal battle between the government and a Moldovan investor. Reuters reported that the freeze was connected to years-long political infighting in the country and the possibility of corruption associated with the Fund.

In January 2018, a Dutch court overturned the freeze but with several strings attached, and in April 2020 a British court, too, weighed in on the case but did not grant broad relief to the Kazakh government seeking to remove those concessions ordered by the Dutch court. They deferred that decision to the original Belgian court, which heard the case in December of 2020 but has yet to reach a verdict as of February 2021.

At stake among all of these disputes are whether sovereign wealth funds are investment arms of governments or independent institutional investors. These kinds of funds, of which Norway's is the largest at over $1 trillion, hold more than $7 trillion worth of wealth spread all over the globe. As a result, the ultimate decision on this case is closely watched by governments around the world.