2014) — The Qatar Investment Authority (QIA)’s asset allocation behaviors are
becoming more conservative to fall in line with the nation’s economic development
agenda and stronger presence in the region, according to GeoEconomica.
Geneva-based political risk management firm said the once “aggressive deal
hunting” sovereign wealth fund—guided by former CEO Sheikh Hamad bin Jassim bin
Jaber al-Thani—had been less active during the past few months, passing on
opportunities such as Deutsche Bank’s recent capital increase.
“The modi operandi of most sovereign wealth
funds, in one way or another, mirror the political cultures and ambitions of
the governments that own them,” the report said. “Qatar’s international
position has most recently come under significant pressure and the Doha has to
deliver on a massive economic development program over the coming decade.”
said Qatar’s foreign policy saw a major change when the Arab Spring unfolded.
Instead of partaking in mediation efforts previously carried out by the nation,
it backed its foreign operations with up to $20 billion in commitments to Arab
countries in transition.
the Doha’s recent move to put Qatar on the map as a global hub also began
straining the nation’s relationships with its neighbors—with spillover effects
on the $175 billion fund’s future investment policy, GeoEconomica said.
Qatar’s economic development agenda for the years ahead, any sensible sovereign
wealth investment policy will necessarily have to factor in the uncertainties
and risks that the country is and will be exposed to in a tense geo-economic
space,” the report said. “Qatar’s more exposed international position today
might result in QIA taking a more holistic investment approach in the future.”
hypothesized that QIA would operate as a more institutional investing entity
with less of a political agenda by observing the following:
1) QIA may
have to commit its investment policies more closely to the Santiago
Principles—the generally accepted principles and practices for sovereign wealth
funds—positioning it well in the international realm of investors.
Qatari government may have to determine what role QIA will play in diversifying
the national economy, particularly if and how QIA may contribute to securing
investments outside the energy sector.
3) QIA may
have to serve as a “substantial financial buffer” alleviating the impact of a
number of risks that could affect the nation: slower growth in developed and emerging
markets; a rush of market volatility; potential financial stress in the
Eurozone; a decline in oil and gas prices; and increased geopolitical tensions.
probably that sense of new realism that should determine QIA’s investment
behavior over the coming years,” the report said.
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