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Qatarβs $500bn sovereign wealth fund is preparing to deploy its cash more aggressively ahead of a petrodollar windfall that could ultimately double its size.Mohammed Al-Sowaidi, the Qatar Investment Authorityβs new chief executive, told the Financial Times the fund expected to βdo bigger-ticket dealsβ and invest with βmore frequencyβ as it embarks on a review of its investment strategy. βWe have to be more aggressively deploying and finding ways where we could actually achieve more returns than the perceived risk,β Sowaidi said. βYou review overall your allocation policies, you look into global trends and you make some calls on the future forecasts and you see how you optimise deployment.βThe fund typically conducts a review of its investment strategy every five years, with the last one taking place in 2019. Sowaidi takes over with the QIA having doubled its workforce since 2018 ahead of an expected windfall as Qatarβs vast expansion of liquefied natural gas production begins to come online. As the fund prepares to step up its deal flow, the QIA is bullish on the US, where it has increased its exposure significantly over the past decade, as well as in the UK and Asia, Sowaidi said, with a focus on technology, artificial intelligence, healthcare, real estate and infrastructure. Qatar has spent almost $30bn to increase production capacity at its vast North Field gasfield Β© QatarEnergyβYou can see the US is spending time onβ.β.β.βcreating more efficient fiscal policies, regulation and regulatory environment. The market perceives that it will be accelerated under the Trump administration,β Sowaidi said. βThe UK, from what weβve heard and what youβve seen, is thinking the same. βThe second thing is the availability of talentβ.β.β.βand the third is that they are free markets, so those are markets where you can invest, can get in and there is very good governance.βThe QIA has built a portfolio of high-profile assets, including UK department store Harrods as well as significant stakes in Canary Wharf and Heathrow airport. It is also a shareholder in German carmaker Volkswagen and Spanish energy group Iberdrola.Qatar, one of the worldβs top LNG exporters and wealthiest nations in per capita terms, has spent almost $30bn to increase production capacity at its vast North Field gasfield from 77mn to 126mn tonnes a year by 2027. State producer QatarEnergy announced further expansion plans in February, meaning overall production capacity is forecast to rise almost 85 per cent from current levels before the end of the decade.Its Golden Pass joint venture in the US with ExxonMobil, which is expected to add another 16mn to 18mn tonnes of LNG a year to the market, will come online late next year.The Golden Pass LNG project in Texas is a joint venture between QatarEnergy and ExxonMobil Β© Golden Pass LNGThe IMF estimated in a report two years ago that by 2027 the expansion was expected to raise the small Gulf stateβs real GDP by 5.7 per cent and add roughly 3.5 per cent of GDP in export receipts a year. The QIA will be the main recipient of the LNG revenues, and Sowaidi said the inflows had the potential to double its size over five years.The fund has recruited heavily in preparation for the windfall, with staff numbers doubling to more than 700 since 2018. Kevin Zhu, who was hired in July as acting chief of investment strategy from Canadian pension fund manager OPTrust, will oversee the investment review. Sowaidi, who was the fundβs chief investment officer for the Americas before being appointed chief last month, said the QIA was also looking to build up its offices in the US and Singapore, and while it manages the majority of its funds internally, it was also βscaling up with third-party managersβ. βThe size of the QIA will grow in terms of people and there will be a deep revision in terms of whether we need to include new strategies as well as approaches to getting into the market. We are just starting to think of those questions,β he said. βItβs basically sharpening the edges of the organisation to be able to grow more and to achieve better returns.βHe added that the QIA did not have plans to be a majority shareholder or operator of the companies in which it invests, but that it would achieve βbigger ticket deals and more frequencyβ.The Qatar Investment Authority is an investor in Elon Muskβs Starlink satellite venture Β© Cate Dingley/BloombergAsked if the QIA had held discussions with Elon Musk and Sam Altman at Open AI, both of whom have courted Gulf sovereign wealth funds to finance their AI projects, Sowaidi said: βWe are quite active with everyone.ββWeβve been an ongoing investor with (Musk) on multiple kinds of ventures,β he added. The QIA was among investors who participated in the recent fundraising by Muskβs xAI, and invested in the ventureβs first capital raising. It is also an investor in X, Muskβs social media platform, and Starlink, his satellite communications venture. Yet while positive on the US market, Sowaidi said he was βconcernedβ about trade wars and inflationary risks as president-elect Donald Trump prepares to re-enter the White House. βOne thing (that) could be potentially a risk with the US administrationβs direction is the potential pressure on inflation,β he said. βWhen you think of the deglobalisation globally, the supply chain reconfigurationβ.β.β.βthis is a global phenomenon. Inflation is the biggest enemy to economies so thatβs something that we are watching very closely.βHe added that trade wars were also βchanging in natureβ, saying they not only affected goods βbut also services, and IT services, which is quite complicated to unfoldβ.The QIA has been expanding its investments in China, and continued to look to invest in the Asian powerhouse, Sowaidi said, while βalso respecting the regulationsβ.He said the fund was βtrying to be out of this sensitive technology space that could potentially have issues with global regulatorsβ. βWe reviewed areas where we think there could be potential complications with the US or with Europe, and we tried to reduce exposure,β Sowaidi added. βWe have a sizeable exposure in Asia and we are ramping it up. We think east Asia presents a great opportunity, in Japan, for example, and South Korea.β
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