Financial statistics available indicate that Qatar is one of the top investors in Europe, investing large amounts in some of the top brands in various countries like Germany, France, United Kingdom, Greece, Switzerland, Spain. Many analysts and other people would like to find out why Qatar is investing so heavily in Europe, what is the investment strategy and what they hope to achieve. Like many countries in the Middle East, Qatar is rich in oil and natural gases and is investing so that it maximizes the returns from the surplus funds it has from the sales of natural resources
The prices and demand for minerals especially crude oil and natural gas fluctuate periodically. So though the countries which are rich in natural gas, crude oil, are wealthy at present, they are aware that the revenues could reduce at any time. Additionally depending on how the natural resources are utilized, the oil, natural gas will get exhausted in a few decades or more. Qatar like other countries has expenses of running a government, providing services for citizens. If the revenues from natural gas, oil reduce due to price fluctuations, the amount available to the government will reduce affecting the quality of life.
Hence Qatar decided to establish the Qatar Investment Authority (QIA) the sovereign wealth fund of Qatar in 2005. It specializes in both domestic as well as foreign investment. It is one of the largest wealth funds in the world behind China, Kuwait, Abu Dhabi, and Russia. The Qatari wealth fund has more than $300 billion in investments. Typically a surplus of $30 to $40 billion is generated every year. Since Qatar is not a very large country, to diversify the investment, reducing the risk involved, the fund is mainly investing in developed economies in Europe, United States, and in developing countries in the Asia Pacific region
During the Euro crisis, the fund managers in Qatar used the opportunities to maximize their returns and invested extensively in a large number of European businesses. To diversify their risk, they have invested in various sectors like real estate, infrastructure, financial services, fashion, media, technology, retail, hospitality, casinos, sports clubs. In addition to getting better returns on their investment, the wealth fund will also control some of the most well-known brands in the world, and get access to their knowledge, technology, and expertise. This can help in the growth of Qatar.
Some of the investments are mainly opportunistic to maximize the returns on the investment. In other cases, the wealth fund may invest in well known reputed brands and businesses mainly for long term benefits and for branding. Also in some cases, long-term investments may help improve the relationship between the governments of different countries. Some of the leading financial service providers in which QIA has invested are the London stock exchange, Barclays, and Credit Suisse. Other well-known brands in which funds are invested include LVMH, Porsche, Volkswagen, Harrods, Sainsbury, Vivendi, Vinci. They have also invested in prime real estate in London, prestigious hotels in Paris, Italy, Switzerland, sports teams and casinos
Mudar had finished his degree in business with major in economics. He travels around to discover different places and to also see and study them up close.