Qatar fund's ex-head sticks with EU assets

DUBAI • While most sovereign wealth funds in the Gulf are moving away from European trophy assets, Sheikh Hamad Bin Jassim Bin Jabr Al Thani is sticking to a strategy honed as head of the Qatar Investment Authority (QIA).

The former Qatari prime minister is taking a 10 per cent stake in Spain's El Corte Ingles, western Europe's largest department store owner, adding to an agreement last year to inject €1.75 billion (S$2.6 billion) into Deutsche Bank. He has also taken over energy company Heritage Oil as he builds his portfolio as an individual investor.

Sheikh Hamad was ousted as prime minister and head of Qatar's sovereign wealth fund in 2013. While Sheikh Hamad continues to pursue prestigious European investments, the fund he once headed is moving away from its strategy of buying stakes in European firms such as Barclays and Total.

The US$250 billion (S$339 billion) QIA - and other Gulf funds - are looking increasingly to Asia to capitalise on the region's growing populations and economies, with Qatar saying in December it was planning a US$10 billion venture with China's Citic Group.

"There's less of a focus on high- profile trophy assets generally and more of a focus on investing in drivers of international economic growth," said Mr Nick Tolchard, head of Invesco Middle East.

"These changes are coming as the funds move on from the financial crisis and have focused on risk management and strategic asset allocation in a low-yield environment."

The QIA on Monday said it will partner with Singapore's CapitaLand to set up a US$600 million serviced residence fund.

It also agreed to pay HK$9.3 billion (S$1.6 billion) to buy a stake in Hong Kong billionaire Li Ka Shing's electric utility last month.

Abu Dhabi Investment Authority joined a group that is planning a bid for Australian electricity assets, people with knowledge of the matter said in April.

These deals contrast with many done during the global financial crisis when Persian Gulf funds were valuable sources of capital to distressed sellers in Europe and the United States.

The QIA bought well-known assets such as the Shard skyscraper in London and Harrods department store, and stakes in Volkswagen, Credit Suisse Group and Barclays. Abu Dhabi Investment Authority bought a stake in Citigroup.

Sheikh Hamad invested in Deutsche Bank through his Paramount Holdings Services last May, while his Al Mirqab Capital SPC vehicle's offer for Heritage Oil valued that company at £924 million (S$1.96 billion).

With his latest deal, Sheikh Hamad said he wants to stay with El Corte Ingles and support its development strategy.

With stores in some of the most-desired locations in Spain, El Corte Ingles is renowned for a broad offering encompassing jewellery and stockings to airplane tickets and vacuum cleaners. Scores of sales staff dressed in red blazers attend to clients.

Qatar does not reveal the size of its assets, but the London-based Sovereign Wealth Fund Institute estimates its holdings at US$256 billion, making it the ninth largest in the world, while Abu Dhabi Investment Authority ranks second with US$773 billion.

Norway has the largest sovereign wealth fund, according to the institute.

"Funds are looking more at emerging markets and investing in private equity, real estate and infrastructure in places like Africa and India," said Mr Brad Whittfield, associate director of sovereign wealth funds and private equity at KPMG in Dubai.

"There's an increasing risk appetite and willingness to search for greater returns."

BLOOMBERG

A version of this article appeared in the print edition of The Straits Times on July 16, 2015, with the headline 'Qatar fund's ex-head sticks with EU assets'. Print Edition | Subscribe