Qatar’s sovereign wealth fund has signalled an ambition to reclaim its position as one of the oil-rich Gulf region’s most acquisitive investors, putting companies on notice as it hunts for new deals.
The Qatar Investment Authority is ramping up its investment plans in North America and Asia, and creating a unit to scour for opportunities in emerging markets in Latin America, Africa and Asia in an effort to snap up stakes in companies directly.
It echoes the approach that catapulted the fund on to the global stage a decade ago when it earned a reputation as an aggressive and swashbuckling investor. After a failed 2007 takeover bid for UK supermarket Sainsbury’s, the QIA purchased minority stakes in Barclays, Credit Suisse, Porsche and Volkswagen during the financial crisis.
However, the fund’s spending spree was curtailed about five years ago as a shift in strategy, which saw the QIA allocate more money to third-party fund managers, coincided with Tamim bin Hamad Al Thani succeeding his father as emir and a fall in oil prices.
In 2017, the QIA was forced to repatriate more than $20bn in overseas deposits to stabilise the domestic financial sector after Saudi Arabia, the United Arab Emirates, Egypt and Bahrain cut diplomatic and transport links with the gas-rich state.
That diplomatic crisis remains deadlocked but Qatar — the world’s richest state in per capita terms — believes it has overcome the financial impact. Now its flagship fund is selling its holdings in externally managed funds to refocus on direct investments in companies and other assets, Sheikh Mohammed bin Abdulrahman al-Thani, the QIA’s chairman, told the Financial Times.
“In the past three years, we invested more in funds, but now we have been more active in the direct investment,” Sheikh Mohammed, who is also the foreign minister. “The management style at that time [before] was investing in funds was better, now there’s a new management.”
In the past six months, we have been quite active, mainly in North America . . . we are opportunistic investors, so if we see an opportunity we go for it
Sheikh Mohammed took over as chairman in November, two months after Mansoor al-Mahmoud was appointed as the QIA’s chief executive.
The QIA’s new approach includes a focus on the technology sector that could put it in competition with Saudi Arabia’s and the UAE’s sovereign investment funds and SoftBank’s Vision Fund.
There are already signs of renewed confidence in its approach, after the QIA last month led a $500m equity financing for SoFi, a US digital lender.
“In the past six months, we have been quite active, mainly in North America . . . we are opportunistic investors, so whenever we see an opportunity we go for it,” said the 38-year-old, who is seen as a rising star in the government. “We are still investing in Europe, but we are more focusing and directing the funds to Asia and the US.”
Sheikh Mohammed said that alongside a focus on technology, healthcare and industrial companies, the QIA is also increasing its weighting to North America and Asia where it was underinvested.
A previous target of investing $35bn in the US between 2015 and 2020 will be increased by $10bn, he said.
In April, the QIA and US-based Crown Acquisitions invested in properties in New York’s Times Square and along Fifth Avenue, including the St Regis Hotel and luxury jeweller Harry Winston. The fund and Crown said they would each acquire a 24 per cent stake in properties controlled by Vornado Realty Trust, which they estimated to be worth $5.6bn. The QIA declined to give details of the fund’s asset allocation.
“I’ve seen them looking at more things and being very transaction driven . . . primarily tech,” a senior banker said. “They are now feeling confident that the blockade is not the end of the world — there’s a cost factor, they know what it is and what they can be doing.”
The IMF said in a report this month that Qatar’s international reserves — excluding the QIA — reached $30.5bn at the end of December, up from $15bn at the end of 2017. It added: “Qatar’s economy has successfully adjusted to the dual shocks of lower oil prices and diplomatic rift.”
Sheikh Mohammed said the QIA still had funds in some Qatari banks, but added “when we find opportunities we will not hesitate to take some of the cash outside”.
However, bankers said the QIA had been receiving less generous funding in recent years as Qatar — the world’s top export of liquefied natural gas — grappled with lower revenues in the wake of the 2014 drop in oil prices, while also spending billions of dollars on infrastructure for the 2022 football World Cup.
- KKR wins race to buy German payments group for €600m 34 views | posted on August 4, 2019 | under Finance
- WeWork tests tolerance for its ‘gov-lite’ structure 14 views | posted on August 15, 2019 | under Finance
- Venezuela sanctions order leaves Citgo’s future in doubt 13 views | posted on August 12, 2019 | under Finance
- BMO 1st Art! Competition Recognizes Fresh Perspectives from Emerging Canadian Artists 7 views | posted on August 12, 2019 | under Finance
- How JR Builds Simple $4,000 Per Month WordPress Website Business 6 views | posted on July 28, 2019 | under Videos