QIA eyes deals in Asian countries in a bid to diversify from UK, North America

By Rahul Vaimal, Associate Editor
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Sheikh Mohammed bin Abdulrahman Al Thani Image
Sheikh Mohammed bin Abdulrahman Al Thani, the chairman of QIA, is also the Foreign Minister of Qatar

Qatar’s sovereign wealth fund, Qatar Investment Authority (QIA), is looking towards Asian countries for deals marking an effort to diversify an investment portfolio heavily slanted toward North America and Europe.

Asia “has been very much on our radar screen,” Foreign Minister Sheikh Mohammed bin Abdulrahman Al Thani said. Sheikh Mohammed is also chairman of the QIA, which manages about $300 billion of assets and ranks as the world’s 11th-largest wealth fund, according to the Sovereign Wealth Fund Institute.

“It’s not only from a growth perspective, but also from a diversification perspective,” he said, pointing to substantial investments in Europe over the past decade. “Asia didn’t take the fair portion of the investments,” although North American deals will remain a priority.

QIA’s chairman declined to identify specific targets, mentioning only a list of locations such as India, Malaysia, Singapore, and China. “We’ve been doing a lot of investments in the last couple years in China, and they’ve been doing very well,” he said.

The wealth fund holds stakes in some of the world’s top companies including London Stock Exchange Group, automaker Volkswagen and trading and mining company Glencore. It agreed to purchase a 30 percent stake in a high-end Istanbul shopping center toward the end of last year, while also agreeing to develop renewable energy in Africa with Italian utility Enel.

China’s sovereign wealth fund

Meanwhile, China’s $1 trillion sovereign wealth fund is restructuring how it decides on international investments as it tries to boost efficiency and make better progress on a goal of increasing the share of private assets in its global portfolio.

China Investment Corp (CIC) formed two committees earlier this month to approve investments in public and non-public assets, replacing bodies at units CIC International and CIC Capital that previously had overlapping responsibility for the process. The new structure for overseas investing should provide a clearer mechanism to implement asset allocation strategies.

The change will help CIC lift direct and alternative investments to half of a global portfolio worth more than $300 billion by the end of next year, a target set in 2018. The fund’s efforts to limit exposure to volatile public markets have been complicated by market rallies that led to an increase in the value of its holdings of bonds and stock. The pandemic and a rise in protectionism also made private deals more difficult.

The fund’s long-term goal has been to expand non-public investments including in private equity, real estate and hedge funds for more stable returns. Stocks and bonds were the company’s main investments in the early years since its inception in 2007.