Qatar’s Wealth Fund Plans $500 Billion US Push Over Next Decade

During his first 15 years at Qatar Investment Authority, Mohammed Al Sowaidi helped establish its US presence and scout opportunities. Now, as head of the $524 billion state-backed entity, he’s pledging to invest an amount nearly equal to the fund’s current size, as part of a major commitment by the Gulf nation.

QIA plans to invest an additional $500 billion in the US over the next decade, Al Sowaidi said in an interview in Doha. The sweeping new outlays will target areas traditionally favored by the fund — such as artificial intelligence, data centers and health care — while also aligning with President Donald Trump’s agenda to reindustrialize the US, he said.

The $500 billion accounts for nearly half of the total $1.2 trillion economic pledge by Qatar during Trump’s visit this week.

“We’re not shifting away from other markets — we’re increasing our exposure to the US,” Al Sowaidi said. The current US policy environment offers a “more promising direction” for long-term capital, he said.

To be sure, the QIA is not alone in pursuing an aggressive, US-focused investment strategy among Middle East funds. Saudi Arabia’s Public Investment Fund, state-owned entities in the United Arab Emirates, and the Kuwait Investment Authority are also looking to deploy billions across similar sectors — raising the likelihood of competition for the same deals and the risk of overpaying for assets.

Al Sowaidi took over as the chief executive officer last year during a pivotal moment for the fund, with an expansion of the country’s gas projects expected to funnel billions of dollars into its coffers. At the same time, Doha is no longer hamstrung by outlays for large projects like the 2022 FIFA World Cup, which is estimated to have cost $300 billion.

With fresh inflows expected, Al Sowaidi plans to steer the fund toward providing capital to large companies, taking stakes in listed businesses and prioritizing bigger deals.

That marks a departure from the QIA’s recent focus on smaller venture capital deals. Still, Al Sowaidi said the move isn’t “an actual strategic shift or pivot,” but rather a “further evolution” of the fund’s approach to keep pace with rapid global change.

The QIA is already the world’s eighth-largest sovereign wealth fund and owns a string of high-profile assets including London’s Harrods department store and the Shard skyscraper. But after years of relatively quiet dealmaking, Al Sowaidi’s plans show the fund is ready to be back in the spotlight.

Al Sowaidi joined the QIA in 2010, when it was led by Sheikh Hamad bin Jassim bin Jaber Al Thani, a former prime minister who’s widely regarded as among the most high-profile investors in the Middle East. Sheikh Hamad was ultimately replaced at the QIA by Ahmed Al-Sayed, who helped orchestrate large deals including Glencore Plc’s $29 billion takeover of Xstrata Plc.

Al Sowaidi, for his part, spent most of his early years at the fund in the Americas, where he helped establish a US office and eventually worked his way up to become chief investment officer for the region.

He holds bachelor’s degrees in finance and statistics from the University of Missouri, and has held roles including as the head of private equity funds and president of the QIA Advisory office in New York. The QIA was then known for its work in snapping up high-profile stakes in the likes of Barclays Plc and Credit Suisse.

Qatar is already one of the world’s richest nations and among the top exporters of liquefied natural gas. But the government’s plans to significantly expand that output is set to add more than $30 billion a year to state revenues.

Some of this cash will be funneled into the QIA. The research consultancy Global SWF recently projected the QIA’s total assets will surge to $905 billion by 2030, meaning it would be vaulted into the ranks of other high-profile investors across the region like Saudi Arabia’s PIF and the Abu Dhabi Investment Authority.

The QIA is already positioning itself to prepare for significant outlays.

Al Sowaidi said the fund typically takes minority stakes in successful businesses, with deal size varying widely by asset class. “In public equity, we can go big,” he said.

“In private equity, we’re capable of multibillion-dollar transactions, but we can also stay nimble — especially in sectors like technology or health care.”

Such a move would be welcome news for the private equity industry. For years, high interest rates have put a damper on global dealmaking. When private equity firms aren’t able to sell their portfolio companies at a healthy pace, they can’t return capital to their investors. Then that money can’t be recycled into new funds.

The QIA’s efforts in that space would help get fundraising moving for the industry again — and make up for the pullback that’s expected from the $925 billion PIF, which has started to increasingly focus on domestic investments.

Already, financial firms are eager for the chance to work more closely with the QIA. Eduardo Saverin’s B Capital, for instance, unveiled plans to set up offices in Qatar earlier this year. Days later, BlackRock Inc.’s Global Infrastructure Partners, said it would set up in Doha too.

Those outside Doha will get more insight into Al Sowaidi’s thinking next week, when he speaks at the annual Qatar Economic Forum, where top finance executives from around the world and key names from Trump’s orbit — including his son Eric and Tesla Inc.’s Elon Musk — are scheduled to speak.

Doha had until recently largely stayed away from the race for regional financial dominance, even as a flurry of Wall Street firms announced plans to set up their regional headquarters in Riyadh and hedge funds flocked to Abu Dhabi.

But Al Sowaidi’s plans show the gas-rich nation is intensifying efforts to catch up.

Source: Bloomberg Europe