Qatar To Launch $12 Billion Overseas Investment Fund
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The Qatari government on Tuesday announced plans to launch a new $12 billion investment company focused on buying distressed assets overseas, with the aim of providing an opportunity for its private sector to invest worldwide alongside the state, reported Bloomberg News.
The Qatari government on Tuesday announced plans to launch a new $12 billion investment company focused on buying distressed assets overseas, with the aim of providing an opportunity for its private sector to invest worldwide alongside the state, reported Bloomberg News.
Qatar Holding, a unit of the Gulf state’s sovereign-wealth fund, is likely to contribute $3 billion from its assets to the new company, said the report, while another $2.5 billion would come from Qatari institutional investors and another $500 million from retail investors. The remaining $6 billion would come from an initial public offering likely to happen in May or June, said Qatar Holding’s chief executive officer Ahmad Mohamed Al-Sayed.
[quote]“The main purpose of this company is to bring the Qatari private sector the opportunity to enjoy the access that Qatar Holding has,” Al Sayed added.[/quote]Qatar Holding has stood out from its sovereign wealth fund peers in the Gulf over the past year by investing in high-profile assets in the wake of the financial crisis. In recent years the sovereign wealth fund has acquired stakes in a diverse range of blue-chip companies, including Total, Volkswagen, and Siemens; achieving a 17 percent return on its investments last year.
Hussain al-Abdulla, vice-chairman of Qatar Holding, told reporters in Doha that the new company would invest across numerous asset classes.
[quote]“You name it – shares, bonds, real estate, private equity. We will look at every sector in every country around the world,” he said.[/quote]Related: Qatar Seeks $5bn Investment in China
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Aladdin Hangari, head of fund adviser Credit Suisse Group AG in Qatar, told Bloomberg that the fund would be strictly independent from its parent investor, Qatar Holding, and would pay a dividend of at least 5 percent in the first year.
The new company is being created “basically to allow the private sector to participate in interesting investment opportunities across the world,” said Hangari.
[quote]“It’s independent and makes its own decisions. It doesn’t have to follow Qatar Holding. Qatar Holding can show it opportunities but the company will decide to invest or not to invest,” he noted.[/quote]According to Al Sayed, the fund’s IPO will be open only to Qataris. Al Sayed however added that he was unsure whether foreign investors would be allowed to invest in the company later on in the secondary market.
Last April, Qatar Holding had announced that it had $30 billion to spend over 12 months. The country itself has the highest per capita income in the world, while public sector pensions and salaries were raised between 50-120 percent in 2011.
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Analysts say that Qatar has been gradually diversifying its assets away from its gas reserves – the third largest in the world.
“Qatar is increasingly flexing its muscles both in the region and on the global stage,” said Gus Chehayeb, research director for the Middle East and North Africa at Exotix.
[quote]The fund’s creation is “in line with the country’s strategy of diversifying its assets from energy and the Middle East, while at the same time extending its influence and brand,” Chehayeb added[/quote]
