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NEXT PHASE: QIA and CITIC Form $10 Billion JV Fund

Ahmad Al-Sayed

Ahmad Al-Sayed, Chief Executive Officer,
Qatar Investment Authority

For years, Qatar has demonstrated significant interest investing in China whether applying for a quota under China’s QFII scheme, being a cornerstone investor in the Agricultural Bank of China’s IPO or opening an office in Beijing. The Qatar Investment Authority (QIA) penned an agreement with state-owned CITIC Group Corporation to form a US$ 10 billion fund for Asia. The 50:50 joint venture investment fund will help the QIA diversify from excess exposure to European portfolio holdings. This deal follows the central banks of China and Qatar signing a major currency swap deal. In addition, according to the People’s Bank of China, one of China’s 4 major banks, Industrial and Commercial Bank of China has been chosen to clear all yuan trades in Qatar.

View the Institutional Investor Profile of the Qatar Investment Authority

CEO Ahmed Al-Sayed of the QAIA told reporters at an investment conference in Beijing, ” We’ve just done a deal in Europe, and we’ll continue doing deals in Europe.”

He then added, ” But as a global fund, also we need to diversify asset allocations and geographical location but we will continue in Europe, of course.”

The QIA is seeking to invest between US$ 15 billion to US$ 20 billion in Asia over the next 5 years. The QIA is growing its Beijing office, and is looking at investments in real estate, infrastructure and healthcare in China. By partnering with state-backed Chinese investment companies, the QIA will be exposed to greater deal flow.

In August 2012, Qatar Holding, a sovereign wealth enterprise of the QIA, acquired a 22% stake in CITIC Capital Holdings. Qatar is looking for greater exposure in the Chinese alternative space.

UNICEF and NBIM to Host Meetings on Children’s Human Rights

The United Nations Children’s Fund (UNICEF), a United Nations programme headquartered in New York City, has partnered with Norges Bank Investment Management (NBIM) to facilitate a series of meetings between companies to discuss issues surrounding children’s human rights.

According to the news release, “the network will facilitate dialogue between leading brands and retailers in the garment and footwear industry to strengthen children’s rights.”

NBIM is invested in many listed companies and have invited them to join a network to tackle these issues. Over the next two years, the organizations plan to hold three workshops as well as quarterly meetings surrounding these issues.

“Over time, we hope and expect that the network will contribute to improved market practices among companies and greater respect for children’s rights,” says Carine Smith Ihenacho, Global Head of Ownership Strategies, in a NBIM press release.

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SouthGobi’s CEO Arrested, CIC Struggles with Investment

The China Investment Corporation (CIC) has long struggled with its investments in coal assets, specifically in globally-listed coal miner SouthGobi Resources Ltd, which operates its flagship coal mine in Mongolia. In November 2009, CIC and SouthGobi Resources inked a convertible debenture deal. [ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]

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Qatar Central Bank Deals with MSCI

MSCI, a stock index company whose benchmarks influence investor behavior, has tremendous indirect power impacting the stock markets of smaller economies. In 1988, MSCI released its emerging markets index, a now-widely-used benchmark for many institutional investors wanting access to growth markets. China and South Korea make up the majority of the benchmark, but smaller economies such as Poland, Chile and even Qatar make up other pieces of it.

[ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]

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