Despite investing heavily in domestic infrastructure projects in anticipation of the 2022 FIFA World Cup and pursuing the Qatar National Vision 2030, Qatar is utilizing its massive sovereign wealth fund […]
Despite investing heavily in domestic infrastructure projects in anticipation of the 2022 FIFA World Cup and pursuing the Qatar National Vision 2030, Qatar is utilizing its massive sovereign wealth fund to invest internationally too. The Qatar Investment Authority (QIA), managed by HE Sheikh Abdullah bin Mohammed bin Saud Al Thani, has more $250 billion of funds at its disposal placing it in the top 10 largest sovereign wealth funds in the world. As such, most of its deployed capital has been restricted to Europe and Asia. However, the QIA has shifted its focus to the US with a pledge to invest over $35 billion in the country over the next five years. Moreover, a recent delegation in February 2015 led by His Highness Sheikh Tamim Bin Hamad Al Thani visited the US in order to discuss how the two countries can collaborate further.
In February 2015, the US Chamber of Commerce President and CEO Thomas J. Donohue hosted the Qatari delegation led by His Highness Sheikh Tamim Bin Hamad Al Thani, which included many high-ranking Qatari officials including the Minister of Foreign Affairs and Finance to discuss the growing opportunity for economic advancement between the two countries. During reception, Mr. Donohue signed a Memorandum of Understanding (MoU) with the Qatar Chamber of Commerce and Industry Chairman HE Sheikh Khalifa bin Jassim Al-Thani. The purpose of the agreement was to formalize a strategic partnership between the two organizations with the goal of strengthening overall bilateral economic relationships. Moreover, the MoU gives a better opportunity for Qatari business to go to the US and for US business to come to Qatar. However, the MoU is merely a complement to the larger and much more impactful announcement of Qatar’s intent to invest over $35 billion in the US over the next five years.
In September 2015, the QIA announced that it is planning to invest massive capital in the US in addition to opening its own office in New York City. The CEO of QIA, HE Sheikh Abdulla bin Mohammed bin Saud Al Thani, said, “It is the perfect location to help strengthen our existing relationships and promote new partnerships as we continue to expand geographically, diversify our assets, and seek long-term growth.“ Despite Qatar’s expertise in project and energy development, the investment is not limited to a single sector. As evidenced by previous investments like Barclays Plc, Total SA, and Glencore Plc, as well as London’s Canary Wharf, Qatar is aiming to acquire stakes in key blue-chip American companies and real estate developments to diversify QIA’s overall portfolio. Similarly, through its commitment to invest nearly 15% of the fund’s overall capital in the US, Qatar has affirmed its confidence in the US’ economic rebound and has solidified the country as a key diplomatic ally.
One such project that is already underway in the US funded by Qatari capital is the $1.5 billion City Center DC project. The project itself was launched eight years ago and was considered one of the largest construction projects the city has seen in two decades. However, due to the financial downturn, the prime real estate has been left undeveloped. Since then, Qatar’s real estate investment arm, Qatari Diar Real Estate Investment Company, decided to pump $650 million into the project in 2010. In late 2014, the City Center DC project was opened and the event was attended by illustrious delegates including Qatar’s Minister of Finance HE Ali Sherif Al Emadi and the Mayor of Washington, DC. Also attending the event was Qatari Diar’s CEO Khaled Mohammed Al Sayed, who said, “This massive project will bring Qatari Diar great returns, especially after selling a lot of residential units in the first phase, and hire diverse commercial space provided by the project.” He added that the successful opening of the project will strengthen the company’s presence in the region and opens up broad prospects for future projects.
Qatari investment in the US is only beginning and economic opportunity between the two countries is already growing. Qatar also bought Current TV to launch Al Jazeera America and Qatar Airways announced plans to expand its US service in 2014. Moreover, Al Faisal Holding, owned by premier businessman HE Sheikh Faisal bin Qassim Al Thani, recently purchased the Radisson Blu Aqua hotel in Chicago. With all things considered, business between the two countries is not looking likely to slow down any time soon.
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