laitimes

The Qatar Investment Authority (QCI) is the ninth largest sovereign wealth fund in the world, controlling 20% of the global sports market

author:China's well-off network

Blue word attention "China Xiaokang Network"

If it were not for this World Cup, few people would associate the word "Qatar" with the image of local tyrants.

The Qatar Investment Authority (QCI) is the ninth largest sovereign wealth fund in the world, controlling 20% of the global sports market

Source: Qatar Investment Authority official website

Recently, the 22nd World Cup kicked off in Doha, the capital of Qatar, and the outside world was shocked by its economic strength. Located on the southwestern side of the Persian Gulf in the Middle East, Qatar is a veritable rich country in the world today. Qatar's economic rise depends on the development of the oil and gas industry, which contributes more than half of its GDP.

However, resources will always be exhausted one day, and while enjoying the dividends of oil and gas, Qatar also realizes that it cannot bet its entire economy on energy.

Establishment of the Qatar Investment Authority

The World Bank uses "oil rent" to measure the difference between the value of a country's crude oil production and the total cost of production, and Qatar is the most convenient and efficient country in the world to extract oil and gas resources. In the 70s of the 20th century, Qatar's oil rental ratio to GDP remained above 50% for a long time, even higher than that of Saudi Arabia, while the world average at that time was less than 2%.

In terms of per capita GDP, Qatar's per capita GDP reached nearly $2,800 in 1970, more than half that of the United States and nearly four times the world average.

In 2021, Qatar's GDP per capita reached US$61,000, ranking 10th in Asia after Singapore. In terms of purchasing power parity, Qatar's GDP per capita in 2021 was close to $100,000, ranking fourth in the world, behind Luxembourg, Singapore and Ireland.

However, Qatar has not lost its sense of risk and distress in the face of abundant resources, and people have realized that relying on a single economic resource means fiscal risk in the economic downcycle.

In 2005, Qatar established the Qatar Investment Authority (QIA), a national investment fund, to identify targets with growth potential and grow their wealth.

The Qatar Investment Authority (QCI) is the ninth largest sovereign wealth fund in the world, controlling 20% of the global sports market

Source: Qatar Investment Authority official website

According to the US Sovereign Wealth Fund Institute, the Qatar Investment Authority currently manages about $300 billion in assets, is the 11th largest wealth fund in the world, and the institution is also one of the largest sovereign wealth funds in the Middle East, which is mainly funded by Qatar's oil revenues.

During the 2008-2009 financial crisis, the Qatar Investment Authority invested billions of dollars in financial institutions Barclays and Credit Suisse, as well as automakers Volkswagen and Porsche.

In recent years, the Qatar Investment Authority has been more active. Sheikh Mohammed bin Abdulrahman Al Thani, chairman of the Qatar Investment Authority, said the company had shifted its focus back to direct investment in businesses and had been looking to expand its presence in North America and Asia.

In 2019, the Qatar Investment Authority led a $500 million equity financing for SoFi, a U.S.-based digital lender. In addition, the company partnered with U.S. real estate group Crown Group to acquire a 24 percent stake in a real estate portfolio controlled by the Wonado Real Estate Trust, which includes some of the most iconic properties along Times Square and Fifth Avenue in New York.

Today, Qatar's sovereign wealth fund is also looking east, actively looking for trading opportunities to change the status quo of portfolios heavily skewed towards Europe and the United States.

Equity investments span the globe

According to data released by Forbes Middle East on October 17, although Qatar is small, Qatar Investment Authority is the ninth largest sovereign wealth fund in the world, with assets under management of $461 billion. British Airways, London's Heathrow Airport, Turkey's Port of Akdeniz, France's 52-60 Champs-Elysées and Egypt's Telecom have all been infiltrated by Qatari capital, and equity investments are all over the world...

Its asset allocation includes credit/fixed income investments, real estate, infrastructure, private equity, and other alternative investments. The direct investment team focuses on private equity investments, including TMT, biomedical, consumer, real estate, industrial and materials.

Citing Reuters reports in 2020, Qatar Investment Authority CEO Mansoor Al-Mahmoud said that 50% to 55% of asset allocation is concentrated in private equity and public equity.

A month ago, Elon Musk's $44 billion acquisition of Twitter was backed by the Qatar Investment Authority, which provided $375 million and now owns less than 1 percent of Twitter.

On October 2, local time, the Qatar Investment Authority said that it would invest 2.4276 billion euros (about 16.94 billion yuan) in the German energy giant and largest power producer Rheinland Group to support Rheinland Group's acquisition of renewable energy assets owned by the American energy company and Edison, and the Qatar Investment Authority will obtain about 9.09% of the shares of Rheinland Group.

Credit Suisse, a century-old investment bank that has recently been mired in rumors of bankruptcy, also has the presence of the Qatar Investment Authority. Credit Suisse went around "calling for help" to raise restructuring funds, and Middle Eastern investors responded. In early November, the Financial Times reported that the Qatar Investment Authority planned to join forces with the National Bank of Saudi Arabia to increase its stake in Credit Suisse to 25%. Among them, the Qatar Investment Authority will increase its stake in Credit Suisse by 5% when the additional shares are issued.

For example, the Qatar Investment Authority has directly invested in 29 projects in the UK real estate market since 2011, with a total investment of about 7.33 billion pounds, accounting for 23% of the entire Middle East investment, exceeding Blackstone's investment of 7.27 billion pounds. The Qatar Investment Authority owns a number of London landmarks: Harrods, the Shard, Canary Wharf, Chelsea Barracks.

According to official data from the US government on November 21, since 2015, the Qatar Investment Authority has invested more than $30 billion in the United States, with a total planned investment of more than $45 billion, of which more than half is concentrated in real estate and infrastructure.

According to The Paper, the assets held by the Qatar Investment Authority include shares in the London Stock Exchange Group, Volkswagen AG and Glencore Plc, Valentino Fashion Group, multiple banks (Barclays, Credit Suisse, Deutsche Bank, etc.) and airlines.

Under the European energy crisis, Qatar's investment has also benefited. Rosneft PJSC, Russia's state-owned oil giant, posted record revenue in 2021 and paid a record dividend to shareholders due to soaring oil prices. QH Oil Investments, a subsidiary of the Qatar Investment Authority, is Rosneft's third-largest shareholder.

At the Belt and Road China-Arab Investment and Trade Association in the middle of this year, the Qatar Investment Authority said that it had invested $10 billion in China since 2016. "Recently, it has invested in the purchase of 30 residential properties, high-tech projects, new energy industry, electric vehicle industry and pre-IPO projects in Japan. Now the fund is looking at the Asian and Chinese markets, increasing the investment quota, hoping to find potential projects to invest in. ”

By investing, control 20% of the global sports market

Qatar's hosting of the World Cup is more like an investment event.

In 2006, Qatar hosted its first mega-international event and the largest Asian Games ever, with an opening ceremony that attracted 1.7 billion spectators worldwide. After the Asian Games, Qatar began to deploy in the field of football.

Less than six months after successfully bidding for the World Cup, Qatar's sovereign wealth fund bought 70% of Paris Saint-Germain for 50 million euros and invested 84 million euros that year, allowing the latter to win the Ligue 1 title six times between 2013 and 2019.

Today, the Qatar Investment Authority controls 20% of the global sports market through investments.

For now, Qatar has lost their home game but is still the hidden winner behind the World Cup.

It is reported that Qatar owns 70% of the shares of the Grand Paris Club, and the Grand Paris Club has attracted many stars to join, including Messi, Neymar, Mbappe and so on. In this World Cup, the Grand Paris Club has 11 members from 7 countries. In other words, Qatar, which has star players from many countries, is basically a "take-all winner" in the World Cup.

In addition, counting the previous World Cups, although the cost has exceeded 100 million, considering the large number of events and high commercial value, they can basically bring considerable economic benefits to the host country.

In 1998, France spent $2.3 billion to host the World Cup. After the game, the country's GDP growth rate turned from negative to positive. In 2006, the World Cup in Germany cost $4.3 billion, but it also cost Germany more than $20 billion. The 2018 World Cup in Russia cost $11.6 billion, in addition to bringing nearly 220,000 new jobs, according to official Russian forecasts, by 2023, "Russia's GDP is expected to grow by 150 billion to 210 billion rubles due to the World Cup."

The Qatar World Cup is expected to see between 1.2 million and 1.5 million tourists visiting Qatar. Considering the airfare, hotel and travel expenses of this part of the travelers, Qatar can earn back about $17 billion.

According to a report released by the Qatar Chamber of Commerce and Industry, the World Cup will bring about $2.7 billion in long-term economic revenue to the country between 2022 and 2035.

According to statistics, since the preparation of the World Cup, Qatar's financial expenditure on airports, subways, housing and other infrastructure has driven its economic growth by 1.5 percentage points.

In addition, it is widely believed that considering the "multiplier effect" in macroeconomics, Qatar's huge expenditure on infrastructure can not only promote the development of construction, energy, public services and other industries, but also continuously generate new demand and drive the exponential growth of the economy.

In this way, although Qatar is trenched, it is not "rich and stupid". It is foreseeable that after making a name for itself in the World Cup and upgrading hardware facilities, the number of potential tourists in Qatar is expected to grow to 40 million in the future.

And the billion-dollar event venues will not be idle. This past October, following the World Cup, Qatar won the right to host the 2023 Asian Cup, when the venues and supporting facilities that have been built will once again come in handy.

Source: WeChat public account "Caizhi Toutiao" synthesized from: China News Network, Beijing News, Yangtze Evening News, Qatar Investment Authority official website, etc

Responsible editor: Fenghua

Proofreader: Yuan Kai

Reviewed: Gong Zimo

The latest market dynamics, the hottest business analysis, the most cutting-edge economic analysis. The financial news you want to know is here. Come and follow the financial headlines ↓↓↓

Read on