(The author is a Reuters Breakingviews columnist. The opinions
expressed are her own)
By Una Galani
DUBAI, Oct 2 (Reuters Breakingviews) - Cash-rich and outward
looking Qatar is a gold mine for advisors. Yet for those hoping
to land work on any of the multi-billion dollar transactions led
by the Gulf state, it’s no longer enough just to put in a call
to its highest-profile sovereign wealth fund, the Qatar
Investment Authority. Today, Qatar’s financial activities are
spread across different but related entities, with blurred
Last week’s confusion over which Qatari entity is studying
an investment in the AUX gold firm of Brazilian billionaire Eike
Batista illustrates the problem. Qatar Holding, a QIA subsidiary
that has taken an interest in gold mining, put out a rare and
strongly worded denial of any involvement. The refutation was
only the third it has issued, after rubbishing speculation of
talks to purchase soccer team Manchester United and Britain’s
Silverstone Grand Prix circuit. But days later, Prime Minister
Sheikh Hamad bin Jassim al-Thani, the chief executive of the
QIA, confirmed the Gulf state is indeed studying an investment.
That might not be inconsistent: the chosen vehicle is
thought to be Qatar Mining, a little-known highly opaque
state-owned entity established in 2010 to invest in mining and
The best way to think about Qatar's investment activity is
as three separate government-backed institutions with separate
remits: the QIA, Qatar Petroleum, and the Qatar Foundation.
The QIA is what most people think of when Qatar pops up on a
deal. It has led the bulk of Qatar’s foreign acquisitions
through its various subsidiaries - mainly Qatar Holding. Stakes
in Barclays (BARC.L), Credit Suisse CSGN.VX, Agricultural Bank
of China (601288.SS), and German carmakers Volkswagen
(VOWG_p.DE) and Porsche (PSHG_p.DE), plus full ownership of
luxury retailer Harrods, have all been pursued by Qatar
Holding. Other QIA subsidiaries include Qatari Diar, which takes
charge of the QIA’s real estate development projects around the
world, and Hassad Food, which has a mission to establish a
global presence as a food producer and secure food supply. Qatar
Holding also owns stakes in Qatar National Bank and Qatar
Telecom, which are themselves internationally acquisitive.
The QIA board includes the prime minister, the governor of
the central bank, and the finance minister. However, the man
credited for forging the fund’s aggressive overseas strategy is
Ahmad Mohamed Al-Sayed, the chief executive of Qatar Holding.
QIA board member Hussain al-Abdulla is another key figure.
The QIA’s sprawling portfolio and broad mandate to diversify
the economy make it a natural target for companies needing
finance, but direct investments that don’t require day-to-day
management is the fund’s speciality.
As for Qatar Petroleum, its function is to maximise the
value of the country’s hydrocarbon reserves and make strategic
investments in energy and petrochemical projects. The fund’s
foreign ambitions are pursued mainly through Qatar Petroleum
Another subsidiary, cash-rich Industries Qatar, is expected
to take on a bigger role. This is used as a vehicle for wealth
redistribution to Qatari citizens, with a roughly 20 percent
stake now held by Qatar’s General Retirement and Social
Insurance Authority (there’s a 30 percent free float).
In turn, Industries Qatar has several subsidiaries including
Qatar Steel, which also has a joint venture with Qatar Mining.
It’s not clear precisely where Qatar Mining fits into the
matrix. The firm has been pretty active, signing memorandums of
understanding or mineral exploration agreements in the
Democratic Republic of Congo, Slovenia, Sudan and Bulgaria,
mostly during foreign visits by the emir, Sheikh Hamad bin
Khalifa al-Thani, the Prime Minister or heir to the throne
Sheikh Tamim bin Hamad bin Khalifa al-Thani. The firm also has a
stake in an Indonesia-based Canadian exploration company with
gold and copper prospects.
The key movers at Qatar Petroleum include the firm’s finance
director Abdulrahman al-Shaibi who is involved in the firms
various expansion efforts, as well as many of Qatar’s wider
Then there’s Qatar Petroleum’s newish chairman, Mohammed
al-Sada, who is also the energy minister. His predecessor,
Abdullah al-Attiyah, is credited with the transformation of
Qatar into a modern state and is now a trusted advisor as
chairman of the emir’s court.
That leaves Qatar Foundation, a not-for-profit entity
controlled by Sheikha Mozah, the second wife of the country’s
emir. Its mandate is to develop Qatar's human capital and a
knowledge-based economy. Still, it owns commercial-looking
investments, housing the government’s stake in Vodafone Qatar.
International technology and research firms, and education
institutes, go to Qatar Foundation when they want to set up in
Increasingly, there are other piecemeal bits too. One-off
vehicles are set up to make private purchases for royals, such
as fashion label Valentino. Sheikha Mozah has led the emirate’s
recent luxury purchases through her Qatar Luxury Group.
Meanwhile, Qatar Sports Investment, which recently completed a
buyout of French football club Paris Saint-Germain, is thought
to be owned by the finance ministry and the Qatar Olympic
Still, a detailed knowledge of the distinctions between
these entities is only so useful. The local population of Qatar
is only around 250,000 and overlap between Qatari board members
of various entities is high.
Take Finance Minister Yousef Hussain Kamal. He sits on the
boards of the QIA and the Qatar Foundation. Energy Minister
al-Sada also sits on the board of Qatar Foundation and is the
chairman of Qatar Petroleum. There is more separation between
the QIA and the seasoned energy experts at Qatar Petroleum. Yet
the country's finance minister and Qatar Petroleum’s finance
director meet on the board of Qatar Financial Centre, which is
leading the Gulf state’s ambitions to become a leading global
Individual entities may create their own strategies, but
bankers say the green light for big spending and real
decision-making is tightly held within a small group of
individuals at the top. This includes the emir and the prime
minister, regardless of whether or not they sit on the board.
This structure provides some protection against Qatar’s
proliferation of entities, which have broad mandates, from
competing for financing or acquisitions. But the confusion over
Qatar’s interest in Batista illustrates that as long as power
remains so concentrated within the emirate, Qatar will struggle
to convince the world that its various sovereign entities should
be seen as meaningfully distinct.
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(Editing by Chris Hughes and David Evans)
Keywords: BREAKINGVIEWS QATAR/
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