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Qatar Investment Authority

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Qatar Investment
Founded2005; 19 years ago (2005)
Headquarters
Doha
,
Qatar
Key people
Sheikh Abdulla bin Mohammed bin Saud Al Thani
AUMUS$170 billion (2013)
Websitewww.qia.qa

The Qatar Investment Authority (Arabic: جهاز قطر للاستثمار) (QIA) is Qatar's sovereign wealth fund, specializing in domestic and foreign investment. The QIA was founded by the State of Qatar in 2005 to strengthen the country's economy by diversifying into new asset classes.

History and profile

The QIA was founded in 2005 by the then-Emir of Qatar Hamad bin Khalifa Al Thani to manage the oil and natural gas surpluses by the government of Qatar.[1] As a result of its stated strategy to minimize risk from Qatar's reliance on energy prices, the fund predominantly invests in international markets (United States, Europe and Asia-Pacific) and within Qatar outside the energy sector. Prior to establishment of the Qatar Investment Authority (QIA) in 2005, Qatar’s Ministry of Finance had a small in-house team to invest revenue from budget surpluses.[2] The Qatar National Vision 2030 foresees the shift from natural gas based revenue to QIA-type investments between now and then.[3]

The QIA wholly controls Qatari Diar, a property investment company.[4]

QIA is estimated to hold in excess of $170 billion of assets[5] an amount that is expected to significantly increase as the state completes its expansion projects to become the world's largest liquefied natural gas exporter with 77 million tons output capacity.[6] The QIA does not publish its holdings to the market.

In June 2013 after the new emir's arrival to power, and general reshuffle into Qatar's main organizations, Ahmad Al Sayed was appointed as QIA's Chairman and Chief Executive, replacing Hamad bin Jassim Al Thani in the post[7] while also remaining Managing Director & CEO of QIA's main subsidiary Qatar Holding.[8] Sayed held the post for 16 months. In January 2015 Sheikh Abdullah bin Mohamed bin Saud al-Thani, chairman of Qatar communication company Oredoo, was appointed new CEO.[9] Khalifa Al Kuwari is the current Chief Operating Officer.

Subsidiaries

Qatar Investment Authority owns (100%) Qatar Holding LLC, and is associated with Qatar National Bank (50%).

QIA is affiliated with Qatar Islamic Bank (16.67%) and with Ubac Curacao NV (1.35%).

Investments

In January 2013, one writer pegged the QIA investment in Britain at 30 billion euros, France 10 billion euros and Germany 5 billion euros,[3] while another reported that the total assets under management in June 2013 was on the order of $100 billion.[10] Qatar Holding's stake in Barclays rose to 12.7% following Barclays' capital raising in October 2008.[11] Qatar Investment Authority holds a small stake in Fisker Automotive. It also holds about 17% stake in the Volkswagen Group, Porsche, Hochtief,[12] as well as investments in Sainsbury’s.[13] The French government has made of Qatar a strategic partner, and the list of partnerships between the two states includes Lagardère (12%) Total (4%), EADS (6%), Technip, Air Liquide, Vinci SA (5%), GDF Suez, Veolia (5%), Vivendi, Royal Monceau, France Telecom and Areva.[3][12][14] In February 2009, France accorded special beyond-OCDE investment privileges to Qatar and its State-Owned Enterprises; one example is capital gains exemptions in France.[14] The QIA is also reported to hold part of Xstrata.[10]

On 8 May 2010, Qatar Holding, an indirect subsidiary of QIA, purchased the Harrods Group from Mohamed Al-Fayed, including the Knightsbridge department store.[15] QIA are also the largest shareholder in Sainsbury's.[16] On 3 December 2010, Qatar Investment Authority, along with Colony Capital and Tutor-Saliba Corporation, was part of an investment group known as Filmyard Holdings, which purchased Miramax from Disney.[17]

In February 2012, it completed the acquisition of Credit Suisse's headquarters in London. QIA holds a 6% stake in Credit Suisse and owns shares in Apeldoorn, the majority owner of Canary Wharf Group. Qatari Diar, a property arm of the fund, along with Canary Wharf, won a £300mn deal to redevelop the Shell Centre in London that houses the Royal Dutch Shell's London headquarters.[18] The French government has offered tax exemptions for Qatari real estate investments in the country and have acquired almost $4 billion of property.[19] In May 2012, it acquired a stake below 3% in Royal Dutch Shell. It has announced a plan to raise its stake to 7%.[20] In late 2012 Qatar Sports Investments (QSI) completed a buyout of the French football club Paris Saint-Germain F.C. (P.S.G.), which valued the club at $130 million.[19] QSI invested a further $340 million in the club, they had bought the Paris Saint-Germain Handball team the previous year.[19] The Qatari president of P.S.G., Nasser Al-Khelaifi is also the director of Qatari owned television network Al Jazeera Sports, which launched French television channels beIN Sport. Qatar has also offered to finance social programs in French suburbs, which has attracted criticism.[19]

In January 2013, Qatar Holding, an indirect subsidiary of QIA, said it would invest $5 billion into petrochemical projects in Malaysia in the three to four years. The investment was said to help Malaysia compete with neighbouring Singapore to become the region’s top petrochemical hub.[21] The QIA was planning to invest $200 million in residential property in India through Kotak Realty Fund in late December 2013.[22]

In October 2014, Qatar Investment Authority, has signed an agreement with CITIC Group Corp to launch a $10 billion fund that will invest in the China region[23] The QIA announced its intention to invest $35b in the US during the next five years, starting in September 2015.[24]

Via Mannai Corporation, it is currently in a process of acquiring the French computer science group GFI.[25]

Qatari Diar

Logo of Qatari Diar

Qatari Diar is a real estate company established by the Qatar Investment Authority in 2005 with headquarters in Doha.

By 2011 the company had stakes in Vinci SA, a firm employing 183,000 in 100 countries; in the utility Suez Environnement and in Veolia Environnement.[26] That same year Qatari Diar bought the Port Tarraco Marina in Tarragona, Spain.[27] Early in 2012 the company had 49 projects in the planning or development stage in Qatar and in 29 countries around the world.[28] The company owns The Shard, a sky scraper in London designed by Renzo Piano and the publicly funded Olympic village also known as East Village, London;[29] and the former Royal Dutch Shell plc headquarters.[30] In January 2013 it became known that the company had put on hold a redevelopment project of Chelsea Barracks worth around GBP 3 billion.[31] During the same month Qatari Diar pulled out of the bidding for the development of the site of Athen's former international airport Ellinikon.[32]

Mayor Vincent C. Gray (District of Columbia) announced in early 2013 that he will travel to Qatar to promote the flow of global capital to the district. Qatari Diar is said to back CityCenterDC with around US$700 million.[33] Representatives of Qatari Diar attended an investment conference hosted by the Peruvian Foreign Investment Authority.[34]

Recent developments

Volkswagen

Bloomberg estimated that in September 2015 Qatar Investment Authority lost $5.9 billion on paper from its stakes in Volkswagen AG and Glencore Plc after the carmaker admitted to using an illegal software to cheat on emissions tests in the U.S.[35] By holding 17% of Volksvagen’s ordinary stock and 13% of preferred shares, Qatar’s sovereign-wealth fund is the third largest investor shareholder in the firm.[35][36]

QIA is also the largest investor in Glencore Plc. (8.2%), a mining company that has reportedly “plunged along with metal prices”.[35]

Barclays

Since 2008 dealings between Qatar Holding LLC and Barclays were investigated by the Serious Fraud Office (SFO) for suspicious cash-raising practices during the global financial crisis.[37] Allegedly, Barclays received €7.5 billion ($8.2 billion) cash injection from QIA’s subsidiary but did not inform its shareholders.[37] Barclays was charged with failing to act with integrity and breaching disclosure rules for UK listed companies.[38]

Moreover, in 2011 both the Serious Fraud Office and the Financial Conduct Authority (FCA) investigated Barclays’ €2.4 billion ($2.7 billion) secret transaction with a Politically Exposed Person (PEP) from Qatar whose identity remains protected by the financial giant and FCA.[38] In that case, Barclays failed to conduct “due skill, care, and diligence” at the base of Britain’s anti-money laundering rules.[39] As a result, the UK financial watchdog meted out a record €92 million ($104 million) penalty against the financial giant.[39]

Controversies

Campaigns

Stop the Funding of Terrorism

In October 2014 the British newspaper Sunday Telegraph launched a two-month long campaign (“Stop the Funding of Terrorism”) to stress Qatar’s persistent negligence in countering terrorist finance and actively supporting terrorist entities and enterprises in the Middle East.[40]

The Telegraph’s campaign included 34 articles published between September 20 and November 16, 2014, some of which accused Qatar of funding the Islamic State of Iraq and Syria (ISIS).[41]

Middle East Eye remarked that Sunday Telegraph’s campaign coincided with efforts by the newspaper owners, David and Frederick Barclay, battling for ownership of three five-star Mayfair hotels Claridge's, The Berkeley and The Connaught.[42] Qatari royal Sheikh Hamad bin Jassim bin Jaber al-Thani was the Barclay brothers’ opponent, and he ultimately prevailed when in April 2015 the Qatar Investment Authority adjudicated the purchase of the three London hotels.[41]

The British newspaper has denied any allegation of editorial interference by David and Sir Frederick Barclay. Analogously, Qatar has denied the Telegraph’s claims.[41]

However, shortly after, concerns on Qatar’s support to extremism and ISIS were voiced at a public event. During a March 2015 conference hosted by the United States Institute of Peace on the occasion of the official visit to the US of the Sudanese Justice and Equality Movement leader, Tahir el-Faki, Qatar’s alleged support of extremism was explored by representatives of the intel community who mentioned several reports suggesting that Sudanese President Omar al-Bashir was hosting ISIS training camps in Darfur supported by the Gulf country.[43][44] A February 11, 2015 piece posted by Sudan quoted a Minni Minawi official denouncing Qatar’s support to extremism in the country channeled through Qatar Charity, Qatar’s largest NGO, and especially directed at “building housing complexes in remote and isolated areas to harbor and train extremist groups.”[44]

Harrods Boycott

London’s department store Harrods faced a boycott campaign in October 2014 against QIA’s subsidiary, Qatar Holding, which purchased Harrods in 2010.[45] The initiative, led by London-based media lawyer Mark Lewis and extensively promoted by the Sunday Telegraph, intended to bring Qatar’s role in terror finance to the public’s attention.[46]

Mr Lewis was quoted by the Telegraph as saying: “We can stand back and do nothing, but when we do, we are paying for that terror … People need to know where their money is going.” The solicitor added that “the scale of its commercial holdings is such that most of us do not even realise that we are buying into its terrorist operations.”[46] The campaign attracted public attention and was endorsed by a number of public figures in the UK.[46]

The Qatar Awareness Coalition

On October 27, 2014 the Qatar Awareness Coalition (QAC), a group of high-profile individuals affiliated with American newspapers, platforms specialized on counterterrorism and private companies seeking to "raise awareness of Qatar and their activities around terror, genocide, and transnational organized crime - including slavery and narcotics", addressed a public letter to Harvey and Bob Weinstein, the founders of Miramax Films.[47][48][49]

As mentioned above, Miramax is largely owned by the Qatar Investment Authority; yet in December 2013 Miramax and The Weinstein Company signed a 20 year deal for future cooperation. The QAC signatories claimed that the deal "reunited the company with its founders", and thereby united "the Weinstein brothers, Miramax, and Qatar – a prolific state sponsor of terrorism across North Africa and the Middle East – in one corporate entity."[49]

The purpose of the initiative was to sensitize Harvey and Bob Weinstein as well as the public to the “conflict of interest” supposedly occurring when "terrorist financing commingles with Hollywood."[49]

Qatar Islamic Bank (QIB)

Qatar Investment Authority’s affiliation with Qatar Islamic Bank (16.67%) raises concerns about the extent to which the sovereign wealth fund’s may be or have been involved in some of the bank’s disputable – if not controversial – activities.

In a September 2015 piece, the Consortium Against Terrorist Finance (CATF) discussed the Sharia-compliant financial giant’s correspondents and posited that several QIB’s correspondents “have controversial histories of affiliation with or support of terrorist or extremist activities”.[50]

Among the most concerning QIB’s correspondents identified by CATF are:

  • Al Rajhi Bank, which became known to the public for the conspicuous financial support offered by some of its senior officers to al-Qaeda’s terrorist cause for decades;[50][51][52]
  • Islami Bank Bangladesh Limited (IBBL), with an extensive track record of engagements in terrorist finance;[50][53][54]
  • Jordan Islamic Bank and MashreqBank PSC, both on the 2013 prohibited investment list of the Illinois State Board of Investments.

References

  1. ^ Gawdat Bahgat (2008). "Sovereign wealth funds: dangers and opportunities". International Affairs. 84 (6). doi:10.1111/j.1468-2346.2008.00764.x. Retrieved 30 December 2013.
  2. ^ QIA Profile Sovereign Wealth Fund Institute.
  3. ^ a b c fdesouche.com: "Ils ont livré la France au Qatar", 13 Jan 2013
  4. ^ Kollewe, Julia (14 June 2010). "Qataris enjoy rich pickings in London property". The Guardian. Retrieved 27 August 2011.
  5. ^ Fund rankings SWF Institute. Retrieved 30 December 2013.
  6. ^ Mark Landler; Julia Werdigier (11 December 2007). "UBS Records a Big Write-Down and Sells a Stake". New York Times. Retrieved 4 August 2008.
  7. ^ Camilla Hall; Simeon Kerr; Ed Hammond (2 July 2013). "New Qatar emir shakes up sovereign wealth fund". Financial Times. Abu Dhabi/Dubai. Retrieved 30 December 2013.
  8. ^ Profile of Ahmad Al Sayed Sovereign Wealth Fund Institute
  9. ^ "Global Finance Magazine - QATAR INVESTMENT AUTHORITY: AL-THANI TO HEAD SOVEREIGN WEALTH FUND". Global Finance Magazine. Retrieved 2016-04-13.
  10. ^ a b aljazeera.com: "Can Qatar replace its renaissance man?", 26 Jun 2013
  11. ^ "Barclays' Qatari capital-raising timeline". Euromoney.
  12. ^ a b nouvelobs.com: "Qatar : "S'ils pouvaient, ils achèteraient la Tour Eiffel", 7 Apr 2013
  13. ^ independent.co.uk: "Emir of Qatar profile: Who is Sheikh Hamad bin Khalifa Al Thani, how did he turn Qatar into the world’s richest nation and why has he decided to abdicate?", 25 June 2013
  14. ^ a b lemonde.fr "La France accorde une exonération d'impôts aux avoirs du Qatar", 21 Feb 2009
  15. ^ "Mohammed Al Fayed sells Harrods store to Qatar Holdings". BBC. 8 May 2010. Retrieved 8 May 2010.
  16. ^ "Major Shareholders". Sainsburys. Retrieved 15 March 2013.
  17. ^ "Disney sells Miramax film studios". BBC News. 30 July 2010.
  18. ^ News Gulf Times. Archived 2012-04-26 at the Wayback Machine
  19. ^ a b c d Sayare, Scott (27 October 2012). "Qatar Becoming a Player in French Sports". The New York Times. p. 1.
  20. ^ "Report: Qatar eyes largest piece of Shell". Upstream Online. 7 September 2012. Retrieved 8 September 2012.
  21. ^ "Qatar to invest $5b in Malaysia projects". Investvine. 29 January 2013. Retrieved 1 February 2013.
  22. ^ Aditi Shah (24 December 2013). "Qatar Fund in talks to invest $200 million in Indian realty". Live Mint. Mumbai. Retrieved 30 December 2013.
  23. ^ "Qatar To Launch $10B Investment Fund With China's CITIC". Investing.com. Retrieved 4 November 2014.
  24. ^ "Qatar: with London under its belt, QIA sets its sights on The Big Apple". Al Bawaba. 30 September 2015. Retrieved 30 September 2015.
  25. ^ http://www.lemondeinformatique.fr/actualites/lire-gfi-bientot-rachete-par-les-qataris-de-mannai-corporation-63049.html
  26. ^ Daneshku, Scheherazade. "Qatari investors near French hotels deal". Retrieved 12 February 2013.
  27. ^ "QATARI DIAR buys super yacht marina Port Tarraco Marina in Tarragona, Spain". Charter World.
  28. ^ "About". Qatari Diar. Retrieved 12 February 2013.
  29. ^ Hatherley, Owen. "The Shard: beacon of the left's skyline". The Guardian. Retrieved 12 February 2013.
  30. ^ Kaur, Sharen. "Qatar Holding plans to invest in Pengerang". Business Times. Retrieved 12 February 2013.
  31. ^ Milmo, Cahal. "£3 billion Qatari Diar redevelopment of Chelsea Barracks put on hold as UK economy stalls". The Independent. Retrieved 12 February 2013.
  32. ^ Dabilis, Andy. "Qatar Gives Up on Hellenikon Bid". Greek Reporter. Retrieved 12 February 2013.
  33. ^ Neibauer, Michael. "Gray eyes procurement, regulatory reforms in State of the District". Washington Business Journal. Retrieved 12 February 2013.
  34. ^ "Peru's investment opportunities attracts Qatar's firms". Andina. Retrieved 12 February 2013.
  35. ^ a b c Stein, Charles. "Qatar Fund Loses $5.9 Billion on Holdings in VW, Glencore". Bloomberg.com. Retrieved 2016-04-13.
  36. ^ "VW scandal: Qatar Investment Authority suffers heavy loss". International Business Times UK. Retrieved 2016-04-13.
  37. ^ a b "Barclays 'offered deal' by Serious Fraud Office over Qatar probe". International Business Times UK. Retrieved 2016-04-13.
  38. ^ a b Reports, CATF. "Qatar&Barclays' Big Game Hunting Leads to FCA Penalties". stopterrorfinance.org. Retrieved 2016-04-13.
  39. ^ a b Dunkley, Emma; Binham, Caroline (2015-11-26). "Secretive Barclays deal involved Qatari clients". Financial Times. ISSN 0307-1766. Retrieved 2016-04-13.
  40. ^ "No ally of Britain should allow the funding of terror". Telegraph.co.uk. Retrieved 2016-04-13.
  41. ^ a b c "Report: UK's Telegraph targeted Qatar over hotels". www.aljazeera.com. Retrieved 2016-04-13.
  42. ^ "Was a London property dispute behind a Telegraph campaign against Qatar?". Middle East Eye. Retrieved 2016-04-13.
  43. ^ "JEM conduct week long visit to Washington DC for US Gov meetings". www.jemsudan.org. Retrieved 2016-04-13.
  44. ^ a b "Darfur rebels accuse Qatar of supporting government military campaign - Sudan Tribune: Plural news and views on Sudan". www.sudantribune.com. Retrieved 2016-04-13.
  45. ^ "Harrods faces backlash against Qatari owners". Arabian Business. Retrieved 2016-04-13.
  46. ^ a b c "Harrods shoppers 'are buying into terror'". Telegraph.co.uk. Retrieved 2016-04-13.
  47. ^ "Stop Qatar Now!: About". www.stopqatarnow.com. Retrieved 2016-04-13.
  48. ^ "Stop Qatar Now!: Coalition". www.stopqatarnow.com. Retrieved 2016-04-13.
  49. ^ a b c "Qatar Awareness Campaign - Miramax and the Weinstein Brothers". The American Report. Retrieved 2016-04-13.
  50. ^ a b c Reports, CATF. "Should QIB be judged by the company it keeps?". stopterrorfinance.org. Retrieved 2016-04-13.
  51. ^ 9/11 Report. (PDF) 9/11 Commission.
  52. ^ Son, Hugh; Ring, Suzi; Almashabi, Deema. "JPMorgan Said Cut Tie to Saudi Bank Amid Focus on Control". Bloomberg.com. Retrieved 2016-04-13.
  53. ^ "Central bank to probe terror links - ucanews.com". ucanews.com. Retrieved 2016-04-13.
  54. ^ "Cop attacker suspect serves on sharia board". Money Jihad. Retrieved 2016-04-13.
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