Numerous sovereign wealth funds utilize London as a central point for their global investments. A recent court ruling has determined that powerful Middle Eastern sovereign wealth funds can claim diplomatic immunity and are beyond the reach of the law when accused of misconduct. This decision arose from a case involving the Kuwait Investment Authority (KIA) where a former executive alleged wrongful dismissal but was denied legal recourse as the English courts lacked jurisdiction over the trillion-dollar fund.

The ruling implies that executives of sovereign wealth funds could seek diplomatic immunity if faced with charges related to financial crimes like fraud or money laundering. The court deemed the KIA as a distinct entity from the Kuwaiti government, allowing it immunity from lawsuits while also granting diplomatic status to its employees. Consequently, oversight of such funds in the UK, exemplified by the current KIA chief executive Abdulmohsin Al Mukhaizeem, is severely restricted.

Critics, including Geoffrey Robertson KC, have raised concerns regarding the preferential treatment afforded to individuals with diplomatic immunity, placing them above the law. The KIA, with around $50 billion worth of UK assets under management, has substantial investments in companies like BP, Vodafone, and HSBC, as well as luxury real estate in the UK, including the former City Hall in London.

Collectively, the world's sovereign wealth funds amount to an approximate £10 trillion, with Gulf petrostates like Saudi Arabia, the UAE, and Qatar emerging as significant players in global investments. These funds operate in London as a primary location for their international investing activities and currently enjoy exemptions from UK corporation tax, annual returns filing requirements, and regulation by the Financial Conduct Authority.