Qatar Planning $35 Billion of U.S. Investments to Diversify

  • Qatar fund opens New York office to help channel investments
  • Sovereign wealth fund QIA remains committed to Asia, Europe

Qatar plans to invest $35 billion in the U.S. over the next five years as it seeks to diversify assets.

The Qatar Investment Authority, which helps manage the country’s energy-generated wealth, opened an office in New York to "better access new and existing investment partners," the sovereign fund said in a statement Monday. It will target various sector of the U.S. economy and help create American jobs, Qatar’s ambassador to Washington, D.C., Mohammed Al Kuwari, said in Twitter postings, without giving more details on potential investments.

The Doha-based fund, which controls more than $250 billion, has deployed the nation’s riches on assets ranging from British bank Barclays Plc to Total SA and commodities trader Glencore Plc, with most of its investments so far confined to Europe. It led a group of investors that agreed in January to buy London’s Canary Wharf financial district in a deal that valued owner Songbird Estates Plc at about 2.6 billion pounds ($3.94 billion).

Some of those bets have unraveled in recent days. Glencore plunged as much as 31 percent on Monday, extending a rout that’s wiped more than $14 billion off its value this month amid investor concern the company isn’t cutting its debt load quick enough. The QIA is also the biggest holder of VW’s preferred shares and the third-largest owner of its ordinary stock. The value of its holding in the automaker may have declined by about 3.8 billion euros (4.3 billion) after last week’s controversy about rigged emissions testing.

Last year, QIA said it planned to set up a $10 billion investment venture with China’s Citic Group to diversify from retail and property assets in Europe. The fund also said it planned to invest as much as $20 billion in Asia in the next five years, and expand its offices in Beijing and New Delhi.

“With world economies, markets and currencies often moving in different cycles and rhythms, the importance of a globally diversified investment portfolio is central to QIA,” according to the statement. Diversification “is a key objective established by QIA’s strategic review,” it said.

In a rare U.S. deal last year, the fund, along with other investors, agreed to buy American Express Co.’s business-travel division for $900 million.

The fund "remains committed to its investments in Europe, Asia and the Middle East,” it said in Monday’s statement.

The fund is also pressing ahead with investments overseas while some nations in the Arabian Peninsula seek to liquidate assets to shore up their finances amid declining crude prices. Saudi Arabia may have withdrawn as much as $70 billion from global asset managers as OPEC’s largest oil producer seeks to plug its budget deficit, according to financial services market intelligence company Insight Discovery.

Qatar doesn’t reveal the size of its assets, but the London-based Sovereign Wealth Fund Institute estimates its holdings at $256 billion, making it the ninth largest in the world while Abu Dhabi’s ADIA ranks second with $773 billion. Norway has the largest sovereign wealth fund, according to the institute.

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