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Qatar’s sovereign funds: A guide for the perplexed

Qatar

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.

October 2, 2012 4:14 by



In turn, Industries Qatar has several subsidiaries including Qatar Steel, which also has a joint venture with QatarMining.

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 financing decisions.

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 adviser 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 the country.

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 Committee.

Still, a detailed knowledge of the distinctions between these entities is only so useful. The local population ofQatar 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 business hub.

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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