[Edaily Marketin Soyoung Park Reporter] The global investment banking (IB) industry is turning its attention to the Middle East, home to a host of the world’s largest sovereign wealth funds. “Oil Drive” is a series covering news from the Middle Eastern investment market. It covers stories of global investment firms diving into “oil money” as well as local developments in the Middle East as the region seeks to move away from oil dependence and focus on investments in new technologies. It also reports on South Korean companies attracting capital from the Middle East. [Editor’s Note]
Qatar, one of the wealthiest nations in the Middle East and North Africa (MENA) region, has played its card to attract foreign investment. This move comes as the country faces a looming fiscal crisis due to the prolonged conflict between the U.S. and Iran, which has blocked export routes for liquefied natural gas (LNG)—its primary source of revenue. This is interpreted as a strategy to establish an organization dedicated to domestic investment, attract global investors, and breathe new life into the country’s capital markets.
According to the global investment banking (IB) industry on the 26th, the Qatar Investment Authority (QIA), Qatar’s sovereign wealth fund, is expanding its investment strategy to include “fostering domestic industries.”
The QIA has launched “Doha Investment,” a new platform dedicated to managing its domestic investment portfolio. At the Qatar Economic Forum held in New York on the 20th, Mohammed bin Abdulrahman Al Thani, Qatar’s Prime Minister and Minister of Foreign Affairs, explained the significance of the launch, stating, “We aim to expand the role of the private sector as a key driver of Qatar’s economic growth.”
Through Doha Investment, QIA will strengthen its investments in and management support for major domestic companies. It also plans to accelerate industrial diversification by expanding private-sector participation and attracting foreign capital.
According to Global SWF, QIA’s assets under management (AUM) are estimated at approximately $580 billion (about 791 trillion won). Originally established in 2005 with overseas investment as its primary objective, QIA is one of the Middle Eastern sovereign wealth funds with deep ties to South Korea. It has also participated in the Series C funding round led by South Korean artificial intelligence (AI) semiconductor startup Rebellion.
While actively pursuing global direct investments, the QIA has also focused on local investments in recent years. For example, it has invested in △Qatar Airways, △the financial institution QNB, △the telecommunications company Ooredoo, △the real estate developer Katari Diar, and △the hotel operator Katara Hospitality.
However, this marks the first time QIA has established an organization dedicated specifically to domestic investments. Doha Investment will assume the role of overseeing and managing the domestic portfolio going forward. Initially, it will oversee 45 state-owned enterprises representing approximately one-third of the sovereign wealth fund’s total assets.
Industry observers have reacted by noting that QIA’s decision to prioritize domestic investments was an expected move. An industry official stated, “QIA had already announced in February of this year that it would expand the scale of its fund-of-funds operations to a total of $3 billion (approximately 4 trillion won) to focus on venture capital investments,” adding, “This is interpreted as a plan to drive private investment, foster the growth of innovative companies domestically, and attract participants from global capital markets.”
In addition, experts on the Middle Eastern capital markets cited the “U.S.-Iran war” as the primary reason for QIA’s focus on domestic investment. This is because Qatar’s fiscal revenue is at risk of shrinking. Qatar’s main source of income is not crude oil but LNG. With the closure of the Strait of Hormuz, the route for stable LNG exports has effectively been cut off.
