Cash-rich and outward looking Qatar is a gold mine for advisers. Yet for those hoping to land work on any of the multi-billion dollar transactions led by the Gulf state, it's no longer enough just to put in a call to its highest-profile sovereign wealth fund, the Qatar Investment Authority. Today, Qatar's financial activities are spread across different but related entities, with blurred dividing lines.
Last week's confusion over which Qatari entity is studying an investment in the AUX gold firm of Brazilian billionaire Eike Batista illustrates the problem. Qatar Holding, a QIA subsidiary that has taken an interest in gold mining, put out a rare and strongly worded denial of any involvement. The refutation was only the third it has issued, after rubbishing speculation of talks to purchase soccer team Manchester United and Britain's Silverstone Grand Prix circuit. But days later, Prime Minister Sheikh Hamad bin Jassim al-Thani, the chief executive of the QIA, confirmed the Gulf state is indeed studying an investment.
That might not be inconsistent: the chosen vehicle is thought to be Qatar Mining, a little-known highly opaque state-owned entity established in 2010 to invest in mining and metals.
The best way to think about Qatar's investment activity is as three separate government-backed institutions with separate remits: the QIA, Qatar Petroleum, and the Qatar Foundation.
The QIA is what most people think of when Qatar pops up on a deal. It has led the bulk of Qatar's foreign acquisitions through its various subsidiaries - mainly Qatar Holding. Stakes in Barclays, Credit Suisse, Agricultural Bank of China, and German carmakers Volkswagen and Porsche, plus full ownership of luxury retailer Harrods, have all been pursued by Qatar Holding. Other QIA subsidiaries include Qatari Diar, which takes charge of the QIA's real estate development projects around the world, and Hassad Food, which has a mission to establish a global presence as a food producer and secure food supply. Qatar Holding also owns stakes in Qatar National Bank and Qatar Telecom, which are themselves internationally acquisitive.
The QIA board includes the prime minister, the governor of the central bank, and the finance minister. However, the man credited for forging the fund's aggressive overseas strategy is Ahmad Mohamed Al-Sayed, the chief executive of Qatar Holding. QIA board member Hussain al-Abdulla is another key figure.
The QIA's sprawling portfolio and broad mandate to diversify the economy make it a natural target for companies needing finance, but direct investments that don't require day-to-day management is the fund's speciality.
As for Qatar Petroleum, its function is to maximise the value of the country's hydrocarbon reserves and make strategic investments in energy and petrochemical projects. The fund's foreign ambitions are pursued mainly through Qatar Petroleum International.
Another subsidiary, cash-rich Industries Qatar, is expected to take on a bigger role. This is used as a vehicle for wealth redistribution to Qatari citizens, with a roughly 20 percent stake now held by Qatar's General Retirement and Social Insurance Authority (there's a 30 percent free float).
In turn, Industries Qatar has several subsidiaries including Qatar Steel, which also has a joint venture with Qatar Mining.
It's not clear precisely where Qatar Mining fits into the matrix. The firm has been pretty active, signing memorandums of understanding or mineral exploration agreements in the Democratic Republic of Congo, Slovenia, Sudan and Bulgaria, mostly during foreign visits by the emir, Sheikh Hamad bin Khalifa al-Thani, the Prime Minister or heir to the throne Sheikh Tamim bin Hamad bin Khalifa al-Thani. The firm also has a stake in an Indonesia-based Canadian exploration company with gold and copper prospects.
The key movers at Qatar Petroleum include the firm's finance director Abdulrahman al-Shaibi who is involved in the firms various expansion efforts, as well as many of Qatar's wider financing decisions.
Then there's Qatar Petroleum's newish chairman, Mohammed al-Sada, who is also the energy minister. His predecessor, Abdullah al-Attiyah, is credited with the transformation of Qatar into a modern state and is now a trusted adviser as chairman of the emir's court.
That leaves Qatar Foundation, a not-for-profit entity controlled by Sheikha Mozah, the second wife of the country's emir. Its mandate is to develop Qatar's human capital and a knowledge-based economy. Still, it owns commercial-looking investments, housing the government's stake in Vodafone Qatar. International technology and research firms, and education institutes, go to Qatar Foundation when they want to set up in the country.
Increasingly, there are other piecemeal bits too. One-off vehicles are set up to make private purchases for royals, such as fashion label Valentino. Sheikha Mozah has led the emirate's recent luxury purchases through her Qatar Luxury Group. Meanwhile, Qatar Sports Investment, which recently completed a buyout of French football club Paris Saint-Germain, is thought to be owned by the finance ministry and the Qatar Olympic Committee.
Still, a detailed knowledge of the distinctions between these entities is only so useful. The local population of Qatar is only around 250,000 and overlap between Qatari board members of various entities is high.
Take Finance Minister Yousef Hussain Kamal. He sits on the boards of the QIA and the Qatar Foundation. Energy Minister al-Sada also sits on the board of Qatar Foundation and is the chairman of Qatar Petroleum. There is more separation between the QIA and the seasoned energy experts at Qatar Petroleum. Yet the country's finance minister and Qatar Petroleum's finance director meet on the board of Qatar Financial Centre, which is leading the Gulf state's ambitions to become a leading global business hub.
Individual entities may create their own strategies, but bankers say the green light for big spending and real decision-making is tightly held within a small group of individuals at the top. This includes the emir and the prime minister, regardless of whether or not they sit on the board.
This structure provides some protection against Qatar's proliferation of entities, which have broad mandates, from competing for financing or acquisitions. But the confusion over Qatar's interest in Batista illustrates that as long as power remains so concentrated within the emirate, Qatar will struggle to convince the world that its various sovereign entities should be seen as meaningfully distinct.For all the latest business news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.
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