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Qatar wealth fund to boost investments in U.K.

The Qatar Investment Authority, which controls over $100 billion of assets, said it was ready to boost investment in the U.K. after acquiring stakes in British companies such as Barclays Plc. and J Sainsbury Plc.

Britain is one of the main destinations for investment,” Ahmad al-Sayyed, chief executive officer of the sovereign wealth fund, said in a Bloomberg Television interview from London Tuesday. “You’ve got great systems, great regulations. We’re happy to invest more when the opportunity is coming.”

Qatar, the richest country in the world on a per-capita basis, diversified from energy production with assets including the Harrods department store in London and stakes in banks such as Barclays Plc. and Credit Suisse Group AG. The wealth fund also played a pivotal role in Glencore International Plc.’s $29 billion takeover of Xstrata Plc. in 2012 after demanding the Swiss commodities trader boost its offer for Xstrata, in which it had built a stake of more than 10 percent.

“The QIA has traditionally leveraged investments in developed markets, especially the U.K. and France, to execute its emerging market growth-focused themes,” Rachel Ziemba, a director at Roubini Global Economics in London, said Wednesday in emailed comments. “Effectively investing in the U.K. gives exposure to stronger financial regulation and reporting than in many emerging markets and exposure to global themes.”

Qatar, the world’s largest producer of liquefied natural gas, is now focusing on real estate, commodities and infrastructure investments, Sayyed said, without giving further details. Qatari money was used to build the Shard, London’s tallest building, while Qatari Diar Real Estate Investment Co. is developing London’s Chelsea Barracks.

Qatari overseas investments dropped to $22 billion last year, less than half the 2012 total of $45 billion, Al-Sharq newspaper reported Dec. 29, without saying where it got the information. The QIA has “much more” than $100 billion of assets, board member Hussein al-Abdullah said in April 2012.

The country bought stakes in oil companies including Total SA, in addition to helping cement the deal between Volkswagen AG and Porsche Automobil Holding SE. It surprised Glencore management in 2012 after taking an activist stance in the Xstrata deal, people familiar with the matter said at the time.

“We create value for the whole stakeholders, for the management, for the shareholders, even for the country we invest in,” Sayyed said. “Whoever has opportunities and has good ideas, we’d be happy to discuss it with them.”

Qatar bought London’s Harrods department store in 2010 and has invested about 250 million pounds ($413 million) in the business, Sayyed said. The store’s revenue has gained 60 percent to 70 percent to surpass 1 billion pounds, he said.

“We are targeting the next number,” he said, referring to a new sales goal. “I don’t want to disclose it, but we have clear planning on what we want to do, how we can do it.”

Sayyed was appointed CEO of the Qatar Investment Authority in July, replacing Sheikh Hamad bin Jassim bin al-Thani, the former prime minister. The change came after Qatar’s former Emir Sheikh Hamad bin Khalifa al-Thani handed power to his son Sheikh Tamim bin Hamid al-Thani at the end of June and a new government was formed. Sayyed had been chief executive of Qatar Holding LLC, the foreign investment arm of the QIA.

The QIA invests globally and is seeking “quality,” above large deals, Sayyed said in response to a question on the fund’s decision to take stakes in sizeable public companies.

“Europe is doing fine, in general,” he said. “America is optimistic. They’re doing well.”

The size of Connecticut and with a population of just 2 million, Qatar began shifting assets to natural resources in 2012, betting on a surge in commodity prices, board member Abdullah said at the time.

The fund is the fourth-largest shareholder in France’s Total, holding a 2 percent stake, while Italian Prime Minister Enrico Letta said Feb. 3 in Doha that he’d discussed with Qatar a potential investment in oil producer Eni SpA.

Increasing U.S. production of natural gas from shale rock “could be a big story,” Sayyed said, adding that “volatility” in emerging markets could also be interesting for the QIA.

 
A version of this article appeared in the print edition of The Daily Star on February 13, 2014, on page 5.
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Summary

The Qatar Investment Authority, which controls over $100 billion of assets, said it was ready to boost investment in the U.K. after acquiring stakes in British companies such as Barclays Plc. and J Sainsbury Plc.

The wealth fund also played a pivotal role in Glencore International Plc.'s $29 billion takeover of Xstrata Plc. in 2012 after demanding the Swiss commodities trader boost its offer for Xstrata, in which it had built a stake of more than 10 percent.

Qatar bought London's Harrods department store in 2010 and has invested about 250 million pounds ($413 million) in the business, Sayyed said.

Sayyed had been chief executive of Qatar Holding LLC, the foreign investment arm of the QIA.

The QIA invests globally and is seeking "quality," above large deals, Sayyed said in response to a question on the fund's decision to take stakes in sizeable public companies.


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