Europe comes under a shower of Qatari cash

In 2005 the tiny Gulf state of Qatar, the world’s second-largest producer of natural gas, established a sovereign wealth fund – The Qatar Investment Authority (QIA).

The QIA is worth some 85 billion dollars and is the 12th biggest of its kind in the world, according to the US-based Sovereign Wealth Fund Institute rankings.

Qatar is no Abu Dhabi – which boasts a whopping 627 billion dollars in its own wealth fund – but this has not stopped the QIA from aggressively flexing its investment muscles around the world.

Qatar Diar, the real estate arm of the QIA, has become a top-ranking global property investor. In the first two years of its existence it bought and renovated hotels in Paris (Hotel Monceau), Milan (Hotel Gallia) and also in Switzerland (Royal Savoy Hotel Lausanne).

British daily newspaper the Guardian estimates that Qatar has invested in excess of 10 billion euros in property in the UK alone since 2005.

The Gulf state has also been making inroads into the banking sector via Qatar Holding LCC, based in Luxembourg and the Netherlands, with investments in China, Switzerland and also the USA.

When the financial crisis hit the world in 2008, Qatar saw an opportunity to grab some bargains.

“With the current crisis, many countries prefer to keep their money instead of investing it abroad,” Qatar’s ruler, Sheikh Hamad bin Khalifa al-Thani, told the Guardian. “For us, though, this is an opportunity that will not be repeated in the next 20 years.”

The message was received loud and clear by the QIA, which went out on a mammoth spending spree.

And when the eurozone debt crisis started to bite, the QIA’s tentacles stretched out to Europe, where in two years it has spent some 10 billion euros, as shown in the multimedia box below.