Qatar Investment Authority (QIA) is the 11th largest sovereign wealth fund in the world, according to the latest ranking by SWF institute (November 2013). With the country now being the largest LNG exporter in the world and accordingly banking in huge income, the assets are only expected to grow in the future. It is estimated that Qatar has between USD 30 and USD 40 billion available to invest on an annual basis.
Qatar’s march over Europe
Most of Qatar’s investments in Europe are mainly concentrated in the UK and France. Earlier this year, Boris Johnson, the Mayor of London estimated that total Qatari investments in the United Kingdom stand at around USD 30.6 billion, mostly located in the London area. Furthermore, in the beginning of the year, London Times announced that Qatar is planning to invest around USD 14, 94 billion in power plants, road projects, railways and the Thames Tunnel project.
Qatar is known as an opportunistic investor, preferring to invest through bilateral deals where it can demand additional benefits in order to ensure investments. One such example is France, which has been one of the prime targets of Qatari investment. During the mandate of the former French administration led by Nicolas Sarkozy, Qatar quickly expanded its influence in France after gaining “preferential investor treatment” exempting Qatar state-owned entities from capital gains taxes on property in France. This grant gave an enormous boost to Qatari investments in the country, as financial assets reaching USD 15 billion were poured in the last five years alone, according to French Foreign Ministry.
Italy and Greece, both severely affected by the crisis, also warmly welcomed Qatari investors in an attempt to save their weak economies. Both governments have managed to convince Qatar to invest USD 1 billion in the near future. The joint venture between Italy’s strategic investment fund and state-owned Qatar Holding, will invest in sectors including food, fashion and luxury goods, furniture and design, tourism and leisure. Qatar Holding announced an intent to buy a 40 percent stake in Milan’s newly built Porta Nuova business district earlier this year, in order to expand its Italian real estate holdings. While the purchase price was not disclosed, the project is valued at about USD 2.6 billion, according to Bloomberg. In Greece however, Qatar’s focus will be on the banking, power, mining and real estate sectors.
In general it should be noted that determining exact investment figures is difficult, due to the fact that GCC sovereign wealth funds are usually not required to openly publish or announce their investments, profits and losses and their deals are often tied-up by clauses of confidentiality.
One of the future tasks of the newly appointed CEO of the Qatar Investment authority- Ahmed Al-Sayed, will be to create a more geographically balanced investment strategy and reducing its reliance on Europe, by searching for new opportunities in Asia, Africa and the US.