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Qatar’s sovereign wealth fund has struck a deal with Canadian asset manager Fiera Capital to set up a fund that will invest $200mn in Qatari stocks, as it seeks to entice financiers to Doha.
The Qatar Investment Authority, estimated to manage $500bn, is trying to expand Qatar’s financial centre and make it a regional hub for money managers.
With lower oil prices expected to slow the economy of its larger neighbour Saudi Arabia, whose appetite for foreign deals is shrinking, financiers are eyeing an anticipated petrodollar windfall in Qatar, where natural gas production is expected to almost double by 2030.
QIA was anchoring the $200mn Fiera Qatar Equity Fund with both cash and shares listed on the Qatar Stock Exchange, it said in a statement on Wednesday, without providing further details.
Toronto-listed Fiera, which will manage the fund, is expected to open an office in Doha, according to a person familiar with the matter. Fiera declined to comment on the office.
Like Saudi Arabia’s Public Investment Fund, the QIA has a mandate to boost Qatar’s domestic economy as well as manage overseas assets, including stakes in London’s Canary Wharf and Heathrow airport, as well as Spanish energy group Iberdrola.
“Attracting overseas asset managers to invest in Qatar equity will fuel market participation and help to diversify and broaden the market,” said Mohammed Saif Al-Sowaidi, QIA chief executive.
Klaus Schuster, chief executive of Fiera Capital’s business in Europe, the Middle East and Africa, said it was the asset manager’s responsibility to “create wealth for institutional investors, but also to diversify Qatar’s capital markets”.
The announcement came two days after Iran targeted a US military base in Qatar in retaliation for US strikes on its nuclear infrastructure. While Qatar’s military intercepted all but one of the missiles and no one was hurt, the attempted strikes briefly embroiled the gas-rich country in the Israel-Iran war.
The agreement with Fiera is the second under a QIA programme to partner with active fund managers — the first $200mn fund went to emerging market specialist Ashmore Group, and is also invested in Qatar-listed equities. Ashmore said in May that it had opened a Doha office.
Meanwhile, the QIA has sought to lure venture capital investors to Doha, with a $1bn fund of funds designed to help Qatar’s nascent start-up scene.
Gulf sovereign funds increasingly aim to get more from the money they invest with outside managers, wanting them to open outposts in their financial centres in a bid to diversify their economies and lessen reliance on fossil fuels, as well as create an investment talent pool.
“There is a different level of engagement when [the partners] are prepared to invest into the country and help diversify your own economy,” the QIA’s head of funds Mohsin Pirzada told the FT this year.
BlackRock last year opened an investment company in Saudi Arabia, anchored by $5bn from the PIF, while hedge funds, asset managers and private equity firms — from Brevan Howard to Partners Group — have flocked to be closer to Abu Dhabi’s approximately $1.7tn sovereign investors. Fiera Capital opened an Abu Dhabi office last year.
“Today’s fund launch represents the next phase of [Fiera’s regional] growth,” the asset manager said in a statement to the FT, “and reinforces our commitment to serving the increasing demand from institutional investors in the Middle East, with further expansion plans in progress.”
https://www.ft.com/content/75de30b1-2f50-4ac2-ab61-49649df4f8c8
