Epic natural-resource wealth, a ruling family becoming more progressive, and a pot of cash to invest in diversifying the economy. Until recently, asset managers looking for all that, plus Gulf exposure, would think first of Saudi Arabia. Ditto start-ups and governments attracted by the $45 billion pumped into SoftBank’s Vision Fund or $20 billion destined for a Blackstone infrastructure fund from the kingdom. With Riyadh’s reputation now crushed following the murder of journalist Jamal Khashoggi, Qatar may be their best alternative.
Pivoting to Doha is less weird than it sounds. True, in June 2017 the tiny desert peninsula was blockaded by Bahrain, Egypt, the United Arab Emirates and Saudi for a litany of alleged sins, precipitating a $30 billion non-resident funding exodus from its banking system. But Qatar switched trading partners and plonked $40 billion of reserves and overseas deposits from its central bank and $300 billion sovereign wealth fund into its lenders. Already $16 billion of that has been refinanced by Asian and European banks and investors, Fitch reckons.
Assuming Qatar can refinance the rest – which should be easier given a potential 4.7 percent budget surplus in 2018 over last year’s 2.9 percent deficit – it would have $40 billion of spare cash. If it was feeling racy, it could leverage that and turn it into a Vision Fund-scale investor. But it doesn’t matter that the Qatar Investment Authority tends to be rather more conservative. Doha’s hike of liquefied natural gas production from 77 million tonnes to 110 million tonnes by 2024 could create an extra $40 billion of revenue. With annual capital investment due to halve from around $27 billion as the 2022 soccer World Cup nears, the QIA could be packing serious firepower.
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