Qatar dangles perks in bid to build a Wall Street of its own
[RIYADH] Officials in Doha are dangling perks to Wall Street firms as they seek to build the city into the next great Middle Eastern financial centre.
Some financial firms have been offered monetary subsidies so they can retrofit offices across the city to fit their needs. Others have been told the government would pay some staffers' salaries if they were to expand in the city.
'Our approach has always been to work towards where we see a competitive advantage,' said Sheikh Ali Alwaleed Al-Thani, chief executive officer of Invest Qatar, which describes itself as a concierge for entrepreneurs and businesses interested in investing in the country.
Unlike Dubai, Abu Dhabi and Riyadh – financial centres in their own right – Qatar is better known for its role as a careful mediator in tense geopolitical conflicts. But two years after the tiny Gulf country splashed out more than US$300 billion to host the FifaWorld Cup, Qatar's expecting a major influx of cash as the country expands its production of liquefied natural gas.
Doha plans to use the US$524 billion Qatar Investment Authority (QIA) as one of the levers to drive its ambitions, according to sources familiar with the matter. The fund could start encouraging private equity and infrastructure funds to set up in the country using its leverage as an investor, the sources said.
A representative for the QIA declined to comment.
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Investor meetings
There are already signs that conversations are picking up in some quarters.
'I did meet with big investors – like even our own QIA, and the Brookfields, Blackstones,' Khalid Al-Obaidli, president of the country's Real Estate Regulatory Authority, said at this week's Qatar Economic Forum. 'All my questions were: What is your business plan? What makes you decide to invest?'
'So we can understand as a government,' he said, 'and make sure we do have the prerequisites for those investments'.
To that end, Invest Qatar has lined up incentives to entice asset management, insurance, wealth management and financial technology players to Qatar.
The programme, billed as the Lusail Financial Services Package, is part of a broader US$1 billion initiative and allows Doha to cover as much as 40 per cent of companies' local investment costs over the next five years, according to a statement. It's also encouraging firms to establish offices in city of Lusail, the main financial and business district.
It's not just finance. The plan also targets technology, logistics and advanced manufacturing firms.
To be sure, Doha still lags behind other centres in the region.
The UAE hubs of Dubai and Abu Dhabi allow easier routes to long-term residencies and some expatriates prefer the lifestyle on offer in those cities. Many firms with a presence in the region might also be reluctant to add another office unless there's significant business coming in.
'The pie is getting bigger at such a fast pace,' Invest Qatar's Sheikh Ali said. 'Many of the projects are actually foreign companies that initially set up, say, in the UAE and Saudi Arabia and then decide to expand in Qatar.'
There are early signs that indicate Doha's efforts have been working. Just this week, the emerging markets-focused fund manager Ashmore Group announced plans to open an office in Qatar, following in the footsteps of BlackRock's Global Infrastructure Partners.
Unlike Saudi Arabia – which demanded that Wall Street firms obtain a regional headquarters license in the kingdom or it would kick them off state contracts – Qatar has sought to use a more friendly approach to luring these firms.
'The focus is on incentivising companies to set up,' Sheikh Ali said. 'We try to be competitive and help induce investment by taking some risk off the table.'
The QIA has already emerged as a key plank to these efforts. The wealth fund last year started a so-called Fund of Funds programme that provides seed funding for venture capital firms in the hopes that they will invest that money locally.
London-based Utopia Capital Management was one of the first to receive such backing and announced plans to open its Middle East headquarters in Doha in February. Firms such as B Capital – started by Facebook co-founder Eduardo Saverin and former Bain Capital investor Raj Ganguly – followed weeks later.
The excitement about Doha's prospects was palpable at the Qatar Economic Forum.
'I have a friend who once told me that the World Cup was like an IPO for Qatar,' Prime Minister Sheikh Mohammed bin Abdulrahman Al-Thani said at the event. 'And I believe this was – thanks to God – a very successful IPO. And it's been oversubscribed.'
The development has not stopped in the aftermath of the World Cup. For years, Qatar has successfully bid for sporting events to come to its shores, which has helped draw thousands of fans. The country is now relying on a line-up of conferences and exhibitions to lure more families, medical tourists, and business travellers.
'We are building four Equinox Hotels in Saudi Arabia, one in Abu Dhabi, one in Dubai,' Jeff Blau, CEO of the real estate developer Related Cos said on stage at the conference this week. 'And in the green room, I think maybe we made a deal for Doha.' BLOOMBERG
The government of the State of Qatar is the underwriter of the Qatar Economic Forum, Powered by Bloomberg.
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