A parade of Wall Street executives joined the Qatar Investment Authority (QIA) on the evening of 27 September at New York’s St. Regis Hotel for the launch of the sovereign-wealth fund’s new US offices. Its push into North America follows a similar strategy to Singapore’s Temasek and Malaysia’s Khazanah, both of which opened US offices in recent years. QIA’s US$ 250 billion fund is now the world’s 9th-largest sovereign wealth fund. And, according to a recent study by GeoEconomica, it also carries the distinction of being the least transparent and least likely to comply with corporate governance norms.
In early September, Qatar’s finance minister made statements that appeared to distance the Qatari economy from other Gulf Arab nations. Qatar’s $65 break-even production price for oil is about 1/3 lower than that of Saudi Arabia, and they may indeed be in a slightly better position than many of their neighbors. Though from a purely fiscal standpoint, it remains a bit of a reach to claim that their situation is enviable. As the world’s top exporter of liquefied natural gas (LNG), the nation’s financial health will likely deteriorate in the face of dwindling petrodollar reserves and low gas prices. And to add insult to injury, the QIA has reportedly suffered nearly US$ 12bn of unrealized losses in the third quarter of this year – nearly half of which occurred last week as Volkswagen, a key holding, lost 34 percent of its market value.
Photo credit: Asharq Al-Awsat