The Qatar Investment Authority (QIA) cannot quit the Russian market and is waiting to analyze its position there due to the Ukraine crisis, one of the sovereign wealth fund’s chief investment officers said on May 24.
Moscow imposed sanctions on foreign investors trading Russian assets in March, saying it wanted to make sure decisions to exit were weighed and not driven by political pressure after Russia deployed troops into Ukraine.
Ahmed Ali Al-Hammadi, QIA’s chief investment officer for Russia, Europe, and Turkey said in a panel discussion at the World Economic Forum:
“We can’t do much in Russia…We have to really assess where to stand on those opportunities there. I think it is a very difficult position for us, being an investor with one name.”
QIA holds a 19% stake in Russian state-backed oil giant Rosneft, which Al-Hammadi said is the only holding “of significance” the fund has in Russia. He added:
“We can’t (exit). All foreign investors are restricted from exiting.”
Mubadala, Abu Dhabi’s second-biggest sovereign fund, declared in March it was suspending investments in Russia owing to the Ukraine crisis.
Qatar’s $300 billion sovereign wealth fund, which owns stakes in Iberdrola SA and the London Stock Exchange, has been expanding its investments away from European markets, which Al-Hammadi said historically accounts for its biggest exposure.
However, the fund is still considering smaller European opportunities. He stated:
“We’re looking at new, emerging, I would say growth-state tech companies. Some of them are quite small and fly below our radar, but we believe that we’re seeing a lot of determination from countries like France, Germany, and Italy.”
Al-Hammadi added that government support for such companies is appealing. QIA also sees opportunities in Turkey, particularly in firms that can reduce their currency exposure, he said.
Losses in May have driven Turkey’s lira backward towards the record lows of 18.4 against the dollar which it attained in December after a series of interest rate slashes.
Fintech and companies investing in the energy transition account for the largest investment opportunities for QIA, according to Al-Hammadi. Although the cryptocurrency market is “too big to ignore,” it is too soon for institutional investors to participate directly, Al-Hammadi said.
Instead, QIA is eyeing investments in the technology key to the market, such as exchanges and blockchain.