“Speculation” around cryptocurrencies is keeping Qatar’s sovereign wealth fund from investing in one of the most volatile asset classes in the world.
Extreme swings in Bitcoin and other tokens are hampering their appeal for institutional investors like Qatar Investment Authority, one of the world’s largest sovereign wealth funds with assets estimated at over $360 billion by Global SWF.
Cryptocurrencies “need a bit of maturity before we make our view about investing in that space”, QIA Chief Executive Officer Mansoor Bin Ebrahim Al Mahmoud said at the Qatar Economic Forum.
The outlook is in question for Bitcoin and other tokens after a volatile rout.
Bitcoin has lost more than 50% from its mid-April high of almost $65,000. The coin started 2021 trading around $29,000 following a fourfold increase in 2020. It bounced back on Wednesday after earlier whipsawing investors with a dip below the $30,000 level.
Asia, U.S. Pivot
Instead of crypto assets, the QIA will focus on continuing to boost investments in Asia and the U.S. as it looks to balance out a concentration of European assets in its portfolio, Al Mahmoud said. The fund is also going to be investing more into warehouses in response to the impact of the coronavirus pandemic on retail and office real estate, he said.
“What we are focusing on within real estate is the theme of investing in warehousing to support e-commerce businesses,” he said. “This is a segment we are deploying into big time.”
The QIA was created in 2005 as the country looked to use income from soaring gas exports to invest in assets to secure future income. It holds stakes in some of the world’s top companies including London Stock Exchange Group Plc, Volkswagen AG and Glencore Plc.
This year the fund will also look to formalize the process of factoring in environment, sustainability and governance – or ESG – considerations into its investment criteria, Al Mahmoud said.
“We have been investing in ESG initiatives and projects for quite some time, and this year it will be institutionalized,” he said. “We will embed ESG into our investment process.”
The Qatar Ministry of Commerce and Industry, Investment Promotion Agency Qatar and Media City Qatar are underwriters of Bloomberg’s Qatar Economic Forum.