Qatar to Invest €1bn in Italian Firms
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A Qatari sovereign wealth fund will invest up to 1 billion euros in Italian industries over the next four years, as part of a strategy to manage the fund’s estimated $60 billion of assets. Its partner, Fondo Strategico Italiano, will match the amount of planned investment, bringing the total amount to up to 2 billion euros.
In a joint statement, both parties said the fund will be managed equally and will start with 300 million euros of capital to be invested in sectors such as food, fashion and luxury, furniture and design, as well as tourism and leisure.
A Qatari sovereign wealth fund will invest up to 1 billion euros in Italian industries over the next four years, as part of a strategy to manage the fund’s estimated $60 billion of assets. Its partner, Fondo Strategico Italiano, will match the amount of planned investment, bringing the total amount to up to 2 billion euros.
In a joint statement, both parties said the fund will be managed equally and will start with 300 million euros of capital to be invested in sectors such as food, fashion and luxury, furniture and design, as well as tourism and leisure.
The investment was announced by Italian Prime Minister Mario Monti and signals an attempt by Rome to lure foreign investment back to Italy after Europe’s financial crisis squeezed bank balance sheets and cut off lending.
At a news conference in Doha, Monti said “allowing foreign investment is not selling off” and argued that the injection will help Italian businesses starved of capital as banks tighten their lending policies.
Qatari Prime Minister Sheikh Hamad bin Jassim al-Thani also lent support to Monti’s austerity drive, which he said was an important measure in strengthening Italy’s overall economic health.
He added:
[quote] We believe Italy is a significant partner for Qatar in Europe. [/quote]
While there were no specific elaborations about which companies will benefit from the investment, the deal deepens Italy’s commercial links with Qatar, which already controls the Italian luxury brand Valentino and has a significant stake in companies such as Tiffany and LVMH.
According to the state-backed FSI, the venture is aimed at investing in “leading businesses and at creating value through several levers, including sector consolidation and transformation through organic and international growth.”
As Italy struggles to boost lacklustre foreign investment and falling demand, executives and politicians have come to consider the country’s luxury goods industry and companies associated with Italian lifestyle to be potential strategic assets able to attract the attention of wealthy foreign investors.
The investment fund is Qatar’s most recent foray into the European economy. In 2008, Qatar paid £2 billion ($3.2 billion) to help recapitalise Barclays, gaining a 6.65 percent stake, making it the largest shareholder in the British bank.
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