Qatar’s Sovereign Wealth Fund Eyeing More Trophy Assets

With a steady availability of capital, Qatar’s sovereign wealth fund has been making opportunistic investments around the world, especially in Europe.

By
Mary Sophia
May 9, 2013

Qatar Investment Authority (QIA), actively involved in making opportunistic investments, has future aims of acquiring more trophy assets and diversifying its portfolio, a report finds.

According to a report issued this week by KPMG detailing the sovereign wealth fund management trends in countries like UAE, Qatar and Kuwait, QIA’s investment strategy was described as “multi-dimensional” with the sovereign wealth fund boasting significant acquisition of assets in industries like hospitality, real estate, financial services, commodities and retail.

The report goes on to emphasise that the role of SWFs have strengthened due to continued global uncertainty.

Vikas Papriwal, head of SWFs and private equity at KPMG said: “It is clear that the global challenges of the last three years have forced organisations around the world, including SWFs, to evolve. While the investment objectives in the region have certainly changed, including geographical and sector focus, diversification remains a key and common objective for Middle Eastern SWFs as countries in the region seek to reduce their reliance on energy, and oil and gas prices.”

QIA’s investment strategy is primarily based on strategic investments in the multinational corporations allowing them access to key economies in the world along with trophy assets that drives branding and contains long-term benefits, said the report.

The fund continues to acquire more trophy assets that provide a long term potential and has shown a marked interest in diversifying its portfolio by expanding into mineral exploration and extraction in Africa and South America.

At a time of economic downturn, spurred by the global financial crisis and European debt crisis, Qatar has proved to be an astute investor by picking up assets in Greece, Spain, Germany and France, stated KPMG.

QIA also has investments in financial bigwigs like Credit Suisse, Barclays, Agricultural Bank of China, Banco Santander Brasil and the London Stock Exchange.

The SWF’s portfolio includes other brand names like Volkswagen, Porsche, Tiffany and Harrods along with investments in French oil major Total and Royal Dutch Shell.

The fund’s acquisition of the French football club Paris St Germain shows that QIA’s investment patterns also support Qatar’s ambitious goals in sports tourism, added KPMG.

Qatar has been constantly under criticism ever since it won the bid to host World Cup 2022, yet the country has not allowed the public criticism to dampen its preparations. The report also mentioned QIA’s plans to diversify Harrods brand through expansion into the hotel business in cities like New York, Malaysia, Paris and China and might include Qatar itself which might need an addition of about 50,000 rooms during the World Cup.

With diverse investments in various industries like hospitality, automotive, banking and commodities, QIA can be an impactful player among the SWFs’ in the world. Other top global SWFs’ in the region include Abu Dhabi Investment Authority, Saudi Arabia’s SAMA Foreign Holdings and Kuwait Investment Authority.

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