Qatar’s Sov Fund Plans 6-Month Pause

DUBAI (Reuters) – Qatar’s sovereign wealth fund, one of the world’s largest investors, has put buying on hold for the next six months and will overhaul its strategy after that to focus more on energy and commodities.

‘For the next six months we will do nothing,’ said Hussein Ali al-Abdullah, executive director of the Qatar Investment Authority, one of the world’s leading sovereign wealth funds with assets recently estimated to total $60 billion.

‘Beginning in the second half of the year, we will review our strategy. The sectors we will focus more on are commodities, food, energy and water because it is an important sector and the prices will pick up,’ he told reporters on Thursday on the sidelines of a conference in Dubai.

Many sovereign funds such as the Kuwait Investment Authority or the Abu Dhabi Investment Authority have suffered big losses on equity investments in the United States as Western markets slumped due to the global financial crisis.

Some have said they now intend to turn their buying power to new asset classes or toward domestic targets after getting burned abroad.

‘We see a structural change in commodities because of the growth of the middle classes in China and India …. the price of commodities will shoot up given that China and India are growing at 6 percent and 3 percent,’ Abdullah said.

He said the fund would hold on to its dollar-denominated assets for now but did not know whether it would continue to do so in the long term.

‘In the short term we are holding on to dollars. In the long term, we don’t know,’ said Abdullah, when asked by reporters whether the QIA was considering reducing its dollar holdings.

Abdullah said the fund had lost less than 20 percent of its value in 2008.

Separately, Abdullah said the government of Qatar, the world’s largest exporter of liquefied natural gas, was studying issuing bonds to raise funds to support development in the energy sector.

‘It is to support Qatar Petroleum because it cannot borrow money at a reasonable cost,’ Abdullah said.

(Writing by Thomas Atkins; Editing by Tomasz Janowski)