Qatar's SWF Plans $5 Billion Investment in Malaysia

1Malaysia Development Bhd (1MDB) and Qatar Investment Authority (QIA) will pursue a partnership to capitalize on opportunities in the energy and real estate sectors in Malaysia's Klang Valley.

(May 17, 2010) — The Qatar Investment Authority (QIA), one of the largest sovereign wealth funds in the world with an estimated $60 billion or more in assets under management, plans to invest $5 billion in projects located in Malaysia.

Following Malaysia’s first recession in a decade, the country is looking to increase foreign investment. “Malaysia is an attractive investment destination with plenty of opportunities to consider and explore,” Qatar Prime Minister Sheikh Hamad Jassim, who is also chief executive officer of Qatar Investment Authority, said to Bloomberg.

A memorandum of understanding between the QIA and 1Malaysia Development Bhd (1MDB), a Kuala Lumpur-based wealth fund, to explore potential ventures, was signed Friday. The projects will include energy and real estate in Malaysia.

Meanwhile, in a reported $2.3 billion deal, the investment arm of Qatar’s sovereign wealth fund last week announced the purchase of London’s luxury department store Harrods from Mohamed al-Fayed, a 77-year-old Egyptian-born businessman. The deal represents the biggest deal in UK retailing since the 11.1 billion-pound takeover of Alliance Boots Plc in 2007, Bloomberg reported.

QIA’s additional investments include some skyscrapers in London’s financial district, Canary Wharf, and stakes in British lender Barclays, supermarket chain J Sainsbury and the London Stock Exchange.

QIA, chaired by the country’s prime minister, was founded by the State of Qatar in 2005 to strengthen its economy by diversifying into new asset classes.

To contact the <em>aiCIO</em> editor of this story: Paula Vasan at <a href=''></a>; 646-308-2742