What Is the Qatar Investment Authority (QIA)?
The Qatar Investment Authority (QIA) is a government-owned entity charged with managing the sovereign wealth fund (SWF) of Qatar. QIA’s mission is to invest, manage and grow Qatar’s reserves in order to support the development of Qatar’s economy.
Though Qatar’s population is relatively small, its sovereign wealth fund is among the largest in the world, and it has among the world's lowest unemployment.
Key Takeaways
- The Qatar Investment Authority (QIA) is that nation's sovereign wealth fund, located in Doha.
- Established in 2005, the QIA has grown to become of of the world's largest SWFs.
- Much of Qatar's wealth comes from oil and gas revenues.
- As of mid-2022, the QIA's portfolio was worth roughly $360 billion.
- The fund has a long-term investment outlook and can invest in a wide variety of asset classes.
Understanding the Qatar Investment Authority (QIA)
The Qatar Investment Authority was established in 2005 and is based in Doha, Qatar. QIA strives to invest and manage funds assigned to it by the Supreme Council for Economic Affairs and Investment (SCEAI). The QIA is owned by the government of Qatar but reports to the SCEAI. Additionally, it is managed by a board of directors. Qatar's State Audit Bureau is responsible for auditing the financial operations of the QIA.
The QIA does not have any mandated limitations on its investment universe and is able to invest in both domestic and foreign marketable securities, real property, real estate, alternative assets, private equity funds, and credit and fixed income securities. The QIA also employs derivatives in its investment strategy. Most of QIA’s investments are outside of Qatar.
The QIA states that it is guided by five principal values: integrity, mission focus, entrepreneurialism, excellence and respect for people. The authority follows a strict four-stage approach to each investment, which is broken down into origination, evaluation, execution and active portfolio management. The QIA also claims that risk management is at the core of its investment strategy.
QIA's Investment Strategy
QIA's portfolio managers employ a patient approach, with long time horizons. The fund uses a 4-step process to choose investments. Origination is the term the QIA uses to find potential investments, often leveraging co-investors such as global banks or other sovereign wealth funds. Evaluation is the next step, where due diligence is employed. Execution involves entering the investment at the best available prices and without moving markets. Active management is the fourth step, where positions are re-evaluated and changes can be made, including disposing of the position.
In 2020, the QIA introduced a more formal top-down portfolio asset allocation process to guide the medium and long-term evolution of its portfolio. QIA’s Reference Portfolio is designed to meet the long-term return objectives, subject to risk and liquidity limits set by the Board. The Reference Portfolio is then used to develop annual and medium-term investment plans for each investment team.
QIA actively trades its portfolio, but are not activist towards invested companies.
QIA Investments
The QIA makes direct investments in projects related to real estate, infrastructure, financial institutions, industry, and investment funds. It also invests in publicly-traded securities including global equities, fixed-income, and alternative investments.
As of mid-2022, QIA's holdings were estimated to be around $360 billion, down from a record $450 billion reached earlier in 2022.
History of the QIA
- 2000: The Supreme Council for the investment of state reserves is established to manage the investment of Qatar’s revenue surplus.
- 2005: QIA is established to develop, invest and manage state reserve funds and other assets.
- 2006: QIA investment operations officially start.
- 2009: New investment teams are created that include financial institutions and real estate.
- 2011: The Capital Markets Team is established.
- 2012: Commodities, infrastructure, retail, and consumer facilities are added.
- 2015: QIA begins prioritizing diversification of its portfolio
- 2017: QIA becomes one of six founding members of the One Planet Sovereign Wealth Fund Group. This initiative focuses on risks and opportunities related to climate change into the management of large, long-term asset pools.
- 2020: QIA announces it will make no new investments in fossil fuels at the World Economic Forum annual meeting.
Who Owns the Qatar Investment Authority?
The QIA is owned by the national government of the State of Qatar. It is run by a CEO and board of governors.
Where Can I Invest in Qatar?
Foreign investors are allowed to own up to 100% of Qatari companies; however, for most investors, accessing such holdings is difficult. Instead, U.S. investors can look to the iShares MSCI Qatar ETF (QAT), which tracks the country's stock market.
How Big Is Qatar’s Sovereign Wealth Fund?
The QIA portfolio is estimated to be worth around $360 billion as of mid-2022. This puts it at the bottom of the top 10 sovereign wealth funds in terms of total assets.
