Qatar wealth fund expansion undeterred by Brexit, Trump

Bloomberg

Qatar’s sovereign wealth fund plans to expand in the UK and the US, as top officials said long-term commercial opportunities would outweigh political uncertainty roiling the two countries. The gas-rich Gulf emirate will add 5 billion pounds ($6.3 billion) to its UK portfolio in the next three to five years, and will set up an office soon in San Francisco — its second in the US after New York. The focus will be on infrastructure, technology, healthcare and real estate, they said.
The plans were announced in London, two days before UK Prime Minister Theresa May is set to begin the two-year clock on negotiations to leave the European Union. The investments could help signal that the UK remains an attractive destination for foreign capital even after it leaves the EU.
“We look at our investments purely on a commercial basis,” Finance Minister Ali Shareef Al Emadi told Bloomberg Television’s Nejra Cehic in an interview, responding to a question on whether turbulent Brexit talks would change Qatar’s view. “We were heavily investing in the UK and Europe during the financial crisis. Most of our investments are very much long-term.”
Qatar, the world’s biggest exporter of liquefied natural gas, is already a major investor on both sides of the Atlantic. It has assets valued at more than 35 billion pounds in the UK, including London landmarks such as the Harrods department store, The Savoy hotel and the Shard skyscraper. The Qatar Investment Authority has also invested more than 60 percent of the $35 billion dollars it has dedicated to the US.
The two-day investment forum is attended by more than 400 Qatari officials and executives, led by the prime minister, as well as bankers from the some of the world’s top financial institutions. The event moves to Birmingham on Tuesday, where British companies will “showcase high-profile investment-ready projects,” according to a statement released earlier this month.
Qatar has a stake in keeping the UK economy and asset prices strong during and after Brexit. It delivers 90 percent of the UK’s imports of the fuel. The emirate invested billions in Barclays Plc during the global financial crisis and has built up a stock and real estate portfolio over the past decade.
The investments “are too small to make a significant difference” to the UK economy, said Ghanem Nuseibeh, founder of London-based consultants Cornerstone Global Associates. But he said the funds would still “reaffirm the attractiveness of the UK to Gulf investors, who see an opportunity to engage in a stronger way with the UK now that it is exiting” the European Union. In a frank assessment of the uncertainty facing the UK due to Brexit, QIA Chief Executive Officer Sheikh Abdullah Bin Mohammed Bin Saud Al Thani said: “If you ask anyone here, they won’t have any clue at what’s happening in this economy.”