Qatar’s overseas investment portfolio growing: Report

November 17, 2010 - 11:13:18 pm

DOHA: Qatar’s overseas investment portfolio is growing and the country is expected to spend tens of billions of dollars in the year ahead as it expands its investments around the world, a UAE-based English daily said.

Fuelled by the largest exports of liquefied natural gas in the world, the country is already well known for its recent acquisitions of trophy assets such as the London department store Harrods and a stake in a fund that owns most of the posh business towers of the city’s Canary Wharf.

“There’s a gusher of money coming into Qatar now,” says Karim Souaid, the managing partner of the Bahrain-registered private-equity company GrowthGate Capital. “You have all these investment bankers swirling around them, dying for fees.”

Qatar is looking to increase liquefied natural gas export capacity to 77 million tones a year, from about 69 million tonnes currently. Eventually it wants to raise total oil and gas output to 5 million barrels of oil equivalent per day, from 2.8 million last year, said the daily. The state’s early efforts have led to a group of interconnected funds and companies that have begun ploughing the country’s savings into assets around the world and into the local economy.

The country is better known for its investments abroad. Its seven-year-old sovereign wealth fund, the Qatar Investment Authority, may have only about $85bn (Dh312.18bn) - considerably less than its Gulf neighbours have saved - but it has increased its activity in the international markets since 2008. Credit Suisse, in which Qatar owns a stake, has emerged as the country’s preferred deal maker. Some of Qatar’s recent acquisitions include Raffles Hotel in Singapore, bought for $275m, a $2.5bn stake in Banco Santander Brazil, and the Chancery building in London.

The steady flow of cash has spilled over into companies across Qatar. QInvest, an investment bank 45 percent owned by Qatar Islamic Bank, is flush with capital, says Anuj Khanna, its head of investment management. “Until four or five years ago, Qatar was relatively low-profile,” Khanna says. “Now it is emerging as a large and disciplined investor. We are a subset of that as the largest local investment firm. Capital is not a constraint for us.”

QInvest, which has $750m in paid-up capital, has recently invested in the Indian brokerage Ambit, the investment bank Panmure Gordon in London, and the UAE catering company Intercat. “We are in an aggressive ramp-up mode,” Khanna says.

With a population of just 1.7 million, of whom fewer than 20 percent are nationals, analysts say only so much of the country’s growing wealth can be reinvested locally. Vast amounts of Riyals are already being spent on education and sports initiatives, the arts and property development, but the surplus is likely to be tens of billions of Riyals. “You will be hearing a lot about Qatar in the years ahead,” Khanna says.

The peninsula