Qatar’s sovereign wealth fund will remain “very active” through the coronavirus pandemic as the oil-rich Gulf investor searches for deals in the health and technology industries, the country’s finance minister told the Financial Times newspaper.
Ali Shareef Al Emadi said the $320bn Qatar Investment Authority’s (QIA’s) “main focus” would be on its international investments as it used the market volatility and plunging asset prices to identify buying opportunities.
“The QIA is looking to invest in various sectors, specifically in the health and tech industries,” said Emadi, who is on the QIA’s board.
“We are looking at businesses that we believe will prove resilient over the long term, despite some negative effects resulting from the COVID-19 pandemic.”
The fund’s strategy mirrors that of other investment vehicles in the region, including Saudi Arabia’s Public Investment Fund (PIF) and Abu Dhabi’s Mubadala Investment Company, which view the economic chaos triggered by the pandemic as a chance to buy assets at knockdown prices.
The PIF has already bought stakes in Carnival, the cruise line operator, and large oil companies including Royal Dutch Shell, Total, Repsol, Equinor and Eni. The Saudi fund is also putting up most of the cash for an investor group that has agreed to buy Newcastle United, the English football club, for 300 million British pounds ($372m).
Like other Gulf states, Qatar, the world’s largest exporter of liquefied natural gas, is being hit by the double blow of the coronavirus and the collapse in oil prices. But as the planet’s richest nation in per-capita terms has substantial financial firepower to weather the storm.
Doha has announced a $21bn support package for businesses, including pumping $2.75bn being pumped into the local stock market. Emadi said the investment in local shares was through other state-affiliated funds, not the QIA.
“QIA’s main focus is on their international activities,” he said. “It will be looking at opportunities and I’m sure with these volatile markets opportunities will rise. The QIA is being very active and they will remain very active.”
The Qatari fund has traditionally been one of the Gulf’s most high-profile investors, snapping up trophy assets such as luxury department store Harrods and The Shard building in London. During the 2008-09 financial crisis it invested billions of dollars in financial institutions Barclays and Credit Suisse, and carmakers Volkswagen and Porsche.
However, around the time Qatar’s Emir Sheikh Tamim bin Hamad Al Thani succeeded his father in 2013, the QIA tempered its activity as it allocated more money to third-party managers. And in 2017, the fund was forced to repatriate more than $20bn in deposits to stabilise the domestic financial sector after Saudi Arabia, the United Arab Emirates, Egypt and Bahrain cut diplomatic links with Doha and imposed a regional embargo on the country.
However, the QIA, chaired by Sheikh Mohammed bin Abdulrahman Al Thani, who is also the foreign minister and considered a rising star in Doha, has been more active in recent years. It has switched its focus back to direct investments in companies and has been looking to increase its exposure to North America and Asia.
Last year, the QIA’s deals included leading a $500m equity financing for SoFi, a US digital lender. It also teamed up with Crown Acquisitions, the US real estate group, to buy a 24 percent stake in a portfolio of properties controlled by Vornado Realty Trust, which they estimated to be worth $5.6bn. The portfolio includes some of New York’s most iconic properties in Times Square and along Fifth Avenue, including the St Regis hotel and luxury jeweller Harry Winston.
Emadi added that the government, which raised $10bn through a bond issuance this month, was budgeting for $55 per barrel of oil this year but planned to reduce its break-even price to less than $40 a barrel after 2022.
Support for Qatar Airways
Doha had “no limits” in terms of what it would provide to support the domestic economy and was “100 percent committed” to Qatar Airways. The airline’s chief executive told Reuters news agency last month that the company was at risk of running out of cash and would eventually need government support.
“We will support Qatar Airways 100 percent and will take whatever measures,” Emadi said. “It’s a very important company for us and plays a very important role.”
He added that work was continuing on infrastructure for the football World Cup, which Qatar will host in 2022, saying there had been no delays.
“Eighty per cent of the 2022-specific sporting infrastructure, stadiums and training sites are complete,” Emadi said. “We are on track and on schedule to be ready ahead of time, with all venues to be completed by 2021. There have been no reductions in scope and no delays.”
Qatar has long been criticised for its treatment of migrant workers involved in the construction of sport stadiums and other infrastructure. Emadi said Doha was “taking all the health measures to ensure the safety of all the workers in terms of safety, but those projects are ongoing”.