Qatar has signed a deal to co-invest $250 million with Barclays’ natural resources private equity investment unit, underlining the gas-rich Gulf state’s desire to plough some of its commodity wealth back into the sector.
The investments in Barclays Natural Resources Investments’ (BNRI) portfolio companies will be done through Qatar Asset Management Company, a joint venture between the gas-rich Gulf state’s sovereign wealth fund and the Qatar Financial Centre.
It cements the relationship Barclays has with Qatar, which through its sovereign fund, was one of the top three shareholders in the British lender as at the end of last year, with a 6.8 percent stake.
Reuters had reported earlier in the day that Qatar and Barclays were set to unveil an asset management transaction.
The Qatar Financial Center provides a platform for financial services, focusing on reinsurance and asset management, and has been positioned as the gas-rich Gulf state's answer to glitzier Dubai’s financial center.
“Our objective for 2020 is that the amount of assets under management in Qatar will be between $150 and $200 billion,” Abdul Rahman Ahmed al-Shaibi, board member and managing director, Qatar Financial Centre Authority said at a conference to unveil the Barclays resources investment.
The investment is consistent with Qatar’s penchant of investing its commodity wealth in the broader commodities sector.
Last week, a senior executive of Qatar’s aggressive sovereign fund, the Qatar Investment Authority (QIA), said that the financial crisis had restricted investment in commodities and that he expected a supply-demand gap to emerge by 2016 or 2017.
QIA has been the most active of the region’s sovereign wealth funds in recent years, deploying the Gulf nation’s plentiful natural gas riches in assets ranging from German sports car maker Porsche to British bank Barclays.
The fund has also been slowly buying into London-listed miner Xstrata recently. Its current holding in Xstrata, which is planning to merge with commodities trader Glencore, is about 7.2 percent.
Barclays will continue to source, execute, manage and exit private equity transactions in the natural resources sector on a global basis and co-investors would be invited to participate immediately upon completion of each transaction, the British bank said.
BNRI has $2.1 billion committed in 22 portfolio companies, and typically commits $50-200 million to each management team to help execute their business plans. The company had been looking for a partner in the Middle East for a while.