Qatar SWF plans to spend $30 billion in 2012
Baku, April 23 (AZERTAC). Qatar Investment Authority (QIA), the Gulf state's aggressive sovereign wealth fund, has more than $30 billion to spend on investments this year and sees commodities as a key target, a senior executive of the fund said on Sunday.
“We like commodities. We like to invest in commodities. Since 2002, the commodity price trend keeps going up,” Hussain al-Abdulla, QIA’s executive board member told reporters on the sidelines of a conference in Doha.
“Also, because of the financial crisis, people are not investing enough in commodities. Maybe in 2016 and 2017 that might create a gap between supply and demand. That might push the price even higher up.”
QIA has been the most active of the region's sovereign wealth funds in recent years, deploying the Gulf nation’s plentiful natural gas riches in assets ranging from German sports car maker Porsche to British bank Barclays.
The fund has also been slowly buying into London-listed miner Xstrata recently. Its current holding in Xstrata, which is planning to merge with commodities trader Glencore is about 6.3 percent.
However, Abdulla declined to comment on the rationale for the stake buy and whether the fund would support the planned merger.
Qatar surprised many observers by passing on the Glencore initial public offering last year as rival Abu Dhabi fund Aabar bought into the flotation.
Qatar has also recently bought stakes in luxury goods house LVMH and oil company Total, in a recent spending spree using its natural gas riches to diversify economic risk. It also owns shares in Credit Suisse and London’s famed Harrods department store.
“Our strategy is simple: we are opportunistic. If there is an opportunity in France, we will go to France. If there is an opportunity in Rwanda, we will go to Rwanda,” Abdullah said.
“We have no asset allocation or geographic allocation. After the financial crisis, all that went in the garbage. Today, it is very difficult for us to see forward. We cannot see more than three months forward.”
When asked if the fund in total had assets worth $100 billion, Abdulla said “much more.” He declined to give further details.
QIA had invested $2 billion in agriculture over the past two years through its Hassad Food security unit, the executive said.
Abdulla said the fund was looking for opportunities for direct investment in Africa, though there are difficulties in investing large amounts in the continent.
“To invest large amounts in Africa, we need a mechanism. No one yet has the know how to invest large amounts in Africa. This is not easy, but we are looking for direct investment.”
Qatar Holding, the sovereign wealth fund's investment arm, passed on a $1 billion investment in European Goldfields last year after the company instead agreed on a $2.4 billion takeover by Canadian group Eldorado Gold.
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