Qatar’s London assets

June 28, 2012

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IT is tiny and has existed as an independent country for only 41 years. Yet Qatar is fast becoming a kingmaker of corporate Britain.

The emirate’s sovereign wealth fund already owns Harrods and the American embassy building in Grosvenor Square, London, as well as One Hyde Park, Chelsea Barracks, the Olympic village, 26 per cent of J Sainsbury, 28 per cent of Canary Wharf’s owner, Song Bird Estates, and sizeable chunks of Barclays and the London Stock Exchange.

Next Thursday, the Qatari prime minister, Hamad bin Jassim bin Jaber al-Thani will arrive in the UK to open the latest piece on his Monopoly board of London: the Shard. The 72-storey tower is 95 per cent-owned by Qatar.

As the financial crisis struck in 2009, western investors took fright and Qatar swooped.

Two of the building’s two-storey apartments, which have views beyond the M25, are expected to become the London homes of members of the Qatari royal family.

It’s not all about luxury, however. The Qatar Investment Authority also owns 20 per cent of Camden market in north London, via its holding in the property group Chelsfield.

But the days when such assets would just be inspected on a trip to Europe are gone. The sovereign wealth fund — to which the gas-rich state gives an annual $30bn-$40bn to invest — has recently turned from passive investor to activist calling the shots.

The other day, the authority, of which Thani is both chairman and chief executive, was playing hardball with some of the best-known names in the City by demanding a much bigger payout from the mega-merger of Glencore and Xstrata.

The Qatar Investment Authority, which has built up an 11 per cent stake in Xstrata, wants 3.25 Glencore shares for each Xstrata share. Glencore is offering only 2.8 shares. If the parties do not come to an agreement, the £50bn deal will fall apart. On Tuesday night, the authority drafted in the service of the PR advisers Brunswick.

A Gulf-based banker who advises the authority said the fund had a clear strategy of going to Glencore and saying: “Give us better terms or you won’t see this merger through.”

The head of investment banking at a global bank in the Middle East told Reuters: “This is more like a private-equity, hedge-fund style transaction, not the kind of stuff you associate with sovereign wealth funds in the region.” — The Guardian, London