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Posted On: 22 March 2013 12:33 pm
Updated On: 12 November 2020 02:12 pm

Competing for Qatari money

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Everyone wants a piece of Qatar it seems or, more specifically, Qatari money. The small Gulf state's influence in the UK, and London in particular, is becoming more evident. It is a joint owner of London's newest landmark, the Shard, it stepped in to provide funds for Barclays back in 2008 which helped the bank avoid being semi-nationalised, and has bought a 20% stake in the company that owns Heathrow airport. The list of what else it owns through its sovereign wealth fund - the government-controlled investment fund - goes on. Harrods, a 20% stake in Camden market, a 26% stake in supermarket Sainsbury's to name but a few. And according to recent reports, the UK government is now looking to tap up the oil and gas-rich Middle East state for some £10bn ($15bn) for infrastructure projects. The Commercial Secretary to the Treasury, Lord Deighton, hinted at the move recently. "We have had multiple recent contacts over the last 12 months with many governments and sovereign wealth funds on infrastructure," he told an infrastructure investment forum. "Strong inward investment into the UK economy has created or secured more than 112,000 jobs in 2011-12, a rise of 19% on the preceding year. "We hope to be even better and are working with institutional investors - from banks through pension funds to sovereign wealth funds - to ensure that the deepest possible sources of capital are available to the widest possible range of infrastructure projects." In demand The UK is not alone in courting Qatari investment. Continue reading the main story “Start Quote You're dealing with a government that has not got a financial issue” Colin Foreman Middle East Economic Digest Debt-laden Greece has been wooing the state, which has already invested in one of Greece's gold-mining projects. Qatar has also agreed to contribute to a fund to reinvigorate disadvantaged suburbs in France. And it is involved with some African nations to help fund charitable projects, and is looking to invest in China's capital market. "Living in Qatar, it seems like every country in the world is currently targeting Qatar," says Iain Webster, executive director for Qatar, at the Brand Union, which advises companies on brand strategy, and whose clients include Qatar National Bank and the Qatar Olympic Committee. Qatar's Emir Sheikh Hamad bin Khalifah Al Thani is one of the world's busiest leaders at the moment, according to Mr Webster. "Every single week he has bilateral conversations with leaders from all over the world." The draw of Qatar as an investor is easy to see. At a time when so many western economies are struggling, liquidity is not an issue for the Gulf state. Screen Shot 2013-03-22 at 12.30.11.png "Qatar can afford to be a long-term strategic investor and at this moment in time to have someone with the liquidity to provide funds with no pressure for short-term returns is quite rare," says Mr Webster. But Colin Foreman, news editor of Middle East Economic Digest (MEED), points out the difference between government and private funding. "It's quite attractive on the sovereign side as an investor," he says, "as you're dealing with a government that has not got a financial issue. "Where it becomes more tricky is with private funders. I don't think foreign banks are particularly open to that kind of funding." 'Trophy assets' So what does Qatar look for when choosing where to invest its vast wealth? Most investments are long-term strategic investments, but they all contribute to the Qatar National Vision 2030 which seeks to shift the country from a carbon economy to a knowledge economy. The awareness that at some stage its oil and gas resources will dry up and planning for the future draws parallels with Norway, which set up a sovereign wealth fund in 1990 to ensure the country had other sources of income in a "post-oil" world.