Moving its focus beyond Europe, the Qatar Investment Authority has already made multi-billion dollar investments in prime New York City and D.C. real estate, and last year opened an office in NYC, signaling its intent for greater investment in the U.S.
While Qatari officials work toward a stronger international geopolitical presence, the Qatar Investment Authority (QIA) has been diversifying its portfolio by seeking big-ticket ventures around the world.
An important building block of the Qatar National Vision 2030 and a respected professional global investor, the QIA since 2005 has built a major global portfolio that now spans a broad range of asset classes and regions. It has done so by investing and managing the funds in a professional, strategic and prudent manner; and by simultaneously developing QIA into a dynamic, multinational, world-class organization.
The QIA has $256 billion worth of assets under management globally, according to the Sovereign Wealth Fund Institute (SWFI). In recent years it has been moving its focus away from Europe – in particular London, where it has stakes in supermarket giant Sainsbury’s and Royal Dutch Shell, and $7 billion directly invested in the London Stock Exchange – towards more investments in the U.S. and Asia.
In June, it made a record $3.4 billion purchase of a large office complex in Singapore’s Marina Bay district. It is reportedly the largest single-tower purchase ever in Asia Pacific. According to The Straits Times, the 43-storey Asia Square Tower 1 has more than “1.2 million square feet of Grade A office space.”
In July, Qatar’s sovereign wealth fund also finalized the purchase of a large-scale apartment and hotel development in Melbourne, Australia. The purchase, which was split between QIA and Singapore-based serviced residence owner-operator The Ascott, was worth more than $50 million.
Qatar already enjoys a sizeable stake in the London real estate market, with the QIA being a major investor in iconic buildings and areas like The Shard and Canary Wharf.
Across the Atlantic Ocean, Qatari officials have made promises to bring formidable investments into the U.S., with plans to invest $35 billion from 2015 to 2020.
As a signal of its intent, the QIA opened an office in New York City last year and acquired a 44% stake in a Manhattan development that will be valued at an estimated $8.6 billion upon completion.
“It is the perfect location to help strengthen our existing relationships and promote new partnerships as we continue to expand geographically, diversify our assets and seek long-term growth,” QIA Chief Executive Sheikh Abdullah bin Mohamed bin Saud Al-Thani said in a statement announcing the opening of the NYC office.
Recently the QIA has finalized the joint-venture purchase of another high-dollar commercial development in Los Angeles. The price tag for the office building, located in the upscale Brentwood neighborhood of the city, came to a total of $225 million.
“Last fall we inaugurated an Economic and Investment Dialogue between the United States and Qatar to establish a platform for enhanced economic cooperation. We are looking forward to holding the second dialogue here in Doha” Dana Smith, U.S. Ambassador to Qatar
Qatar’s wealth fund has put into motion other retail projects in the U.S., including the construction of a $700 million office tower in Long Island City, New York and the $250 million Conrad Washington D.C., a luxury hotel in the U.S. capital. In August QIA also bought a 9.9% stake in Empire State Realty Trust, which translates to a $622 million investment.
QIA is not the only Qatari investment group with interests in the U.S. The First Investor (TFI), the investment arm of the Doha-based sharia-compliant financial institution Barwa Bank, recently completed leasing space in a Washington D.C. office complex. (QIA’s real estate investment branch was, in fact, the anchor investor behind the fund that developed the complex).
“The First Investor is the boutique investment bank and it manufactures funds and products for us to distribute to our client base at the bank,” says Barwa Bank Acting CEO Khalid Al Subeai.
“We do have exposure outside of Qatar. Historically, we have had the First Investor-U.S. fund, which was a $800 million fund. The assets in the fund were [the] huge development in Washington D.C., and we managed to develop that property up until completion. It was a mixed-use development, and upon completion it was handed over to the ultimate investor.”
Dana Smith, the U.S. Ambassador to Qatar, says that the U.S. and Qatar have established a strong trade partnership that will provide “opportunities” in both nations.
“Last fall we inaugurated an Economic and Investment Dialogue between the United States and Qatar to establish a platform for enhanced economic cooperation. We are looking forward to holding the second dialogue here in Doha,” she says.
“Qatar is a growing export destination for U.S. products. From 2004 to 2014, U.S. exports to Qatar grew nearly tenfold, eclipsing, for the first time, $5 billion on an annual basis. And the opening of the Qatar Investment Authority office in New York City last fall was another important milestone. I am proud that Qatar is investing in the United States because I think it is a reflection that our economy is still growing, and despite the difficult years that the global economy has had, Qatar has recognized that the U.S. economy has incredible potential for continued growth.”
Qatar’s investments in the U.S. are reflected in the interest many American companies have taken in the small nation on the Arabian Peninsula.
“We have the big companies that people hear about—such as Boeing, ExxonMobil—and there are large companies here that are helping the country develop or market a resource; there are companies that provide a service or equipment and there are support businesses as well. For example, Boeing is supporting Qatar Airways, but is also providing support for the defense and security of the country,” says Robert Hager, Chairman of the American Chamber of Commerce Qatar.
He adds that Qatar is now facing a renewed push to guide its economy away from a perceived dependence on oil and natural gas resources.
“The oil shock really is a call to speed up diversification. You cannot depend on being a commodity-based economy in the long term; you need to be able to diversify.
“It is not a question of the resources going away; the issue is that as the value of the resources decreases, new sources of value need to be found. You will continue to have to maximize the value of this important resource. But, that said, diversification helps for the future and it helps you survive shocks in prices. You want to allow the next generation to have a full complement of choices, and that is really what part of diversification is as well: giving the next generation more opportunities. That is what we can do for our children, and what Qatar wants to do for its children.
“I think we are seeing this accelerate, and I think the U.S. can help in several ways. We can help with the expertise. We have a very strong history of incubating and supporting knowledge-based companies. This is a small population, and knowledge-based does not mean you need 1,000 people to do something: it means you need a lot of good smart people. With a small population, a knowledge-based economy is a good way to look at the future. You can leverage knowledge much more than having to leverage people.”