By Tom Arnold
LONDON (Reuters) – Qatar Investment Authority has more than half of its assets invested in private equity and listed shares as it chases higher returns, its chief executive said on Wednesday.
As a long-term sovereign fund without short-term liabilities to meet, QIA’s risk appetite is bigger than some of its peers, said Mansoor Al-Mahmoud during an International Institute of Finance event.
“Our approach is always to be a long-term investor, this gives us an advantage,” he said. “Companies are looking for investors with long-term horizons.”
The wealth fund, with assets estimated by the Sovereign Wealth Fund Institute at about $295 billion, has between 50% and 55% of asset allocation focused on private equity and public equity, Mahmoud said.
In an effort to overcome subdued returns in a low-yield environment, sovereign funds have shifted more of their focus to stocks and private equity, with some funds increasingly favouring direct deals in private equity.
QIA is also active in venture capital, with an aim of seeking greater returns, Mahmoud said, adding that QIA had stopped investing in fossil fuel companies.
The shift on fossil fuels follows similar moves by some other sovereign funds, including that of Norway, which last year said it will divest companies solely dedicated to oil and gas exploration and production.
The Qatar fund remains one of the largest investors in real estate and partly owns Canary Wharf Group, which in July unveiled plans for a large mixed-use development, including business space, in London’s financial district.
Following the global move to work from home in the face of the COVID-19 pandemic, Mahmoud said he expects people to want to return to the office.
“Everyone will need three types of spaces: work, home and public spaces,” he said, adding that the latter could include spaces like gyms and malls.
(Reporting by Tom Arnold; Editing by David Goodman)