Qatar wealth fund ‘to create $100bn unit in revamp’

Qatar’s sovereign wealth fund is undergoing its biggest overhaul since 2014, grouping $100bn of investments in local companies into a new unit and abandoning the Qatar Holding name synonymous with its highest-profile deals, according to sources.

About $100bn of the Qatar Investment Authority’s stakes in companies such as Qatar Airways and Qatar National Bank will be placed into a new internal division named Qatar Investments, they said.

The fund is seeking to bring greater oversight by having a single person in charge, the sources said.

The Qatar Holding name, under which the state gained an international profile after investing in companies ranging from Glencore to Barclays, will now be replaced by the QIA name on international investments.

The country isn’t planning to allocate any new money to the QIA this year or withdraw funds and has asked it to rely on asset sales or dividend income for new investments, one of the sources said.

The changes at the QIA show that even the biggest sovereign wealth funds are having to shift focus as the slump in the oil price brings to an end an era of vast wealth accumulation and buyouts of trophy assets around the globe.

The value of listed equities held by the world’s largest funds will probably drop to $2.64tn this year, from about $3.04tn at the end of 2015, according to a report published in February by the Sovereign Wealth Fund Institute.

Funds based in the Arabian Gulf, such as the Abu Dhabi Investment Authority and the Qatar Investment Authority, are facing the most “financial distress”, the report said.

The QIA declined to comment.

The changes are among the biggest initiatives undertaken by the fund since Sheikh Abdulla bin Mohamed bin Saud Al Thani was appointed chief executive officer in 2014.

Under Sheikh Abdulla, the fund is boosting its focus on Asia and the US as it seeks to diversify the geographic location of its assets.

Diversification “is a key objective established by the QIA’s strategic review”, the fund said in a statement last September.

The fund is also hiring other senior executives amid the changes, according to the sources.

Phil Dunne, former chief financial officer at Citigroup Alternative Investments, recently joined as CFO, the sources said, while Ole Christian Froseth is the new head of fixed income.

The QIA also recruited Darren Winstone from Abu Dhabi Investment Authority as its new head of passive investments in April, a unit which seeks to invest through external fund managers, they said.

The Qatari fund, the ninth-largest sovereign wealth fund in the world with more than $250bn of assets according to the Sovereign Wealth Fund Institute, said last year it was planning to invest $35bn in the US over the next five years as it opened an office in New York.

The QIA is the biggest foreign buyer of US offices so far this year after partnering with office REIT Douglas Emmett on a $1.34bn acquisition of four Los Angeles office buildings, according to Bloomberg Intelligence.

Saudi Arabia is also restructuring its sovereign investment strategy as it looks to diversify the economy away from oil.

The government will transfer its ownership of state-oil company Saudi Aramco to the Public Investment Fund and sell a stake of not more than 5% to the public.

The move will transform the PIF, as the fund is known, into the world’s largest sovereign investment company with assets of more than $2tn.

Courtesy: gulf-times.com