Middle Eastern sovereign wealth funds have invested $7 billion in China since June last year.
Quoted Reuters “Two informed sources said: Qatar Investment Authority, Qatar’s sovereign wealth fund, agreed to buy a 10 percent stake in China’s second-largest mutual fund company, highlighting Beijing’s growing ties with Middle Eastern countries amid escalating tension in its relations with the West.
The proposed Qatari investment in the Chinese Asset Management Company (China AMC) comes amid a wave of intense activity between China and the Gulf states to strengthen political, economic and financial relations, with escalating geopolitical tensions due to the ongoing war in Gaza and the Russian-Ukrainian conflict.
China has become one of the main countries importing liquefied natural gas from the Middle East, and has strengthened its relations with Doha at a time when Qatar is seeking to implement a huge project to increase production.
Global SWP, which tracks investment fund data, reported that sovereign wealth funds in the Middle East have invested $7 billion in China since June last year.
The two informed sources said that the Qatar Investment Authority agreed to buy the stake in China AMC from the investment company Primavera Capital.
The two sources declined to provide financial details of the deal, but Chinese brokerage CITIC Securities, which owns about 62 percent of China AMC, said in March that it had decided to give up its right to buy the 10 percent stake in Primavera for $490 million, according to the report. the least.
The two sources, who requested anonymity because they were not authorized to speak to the media, said that the proposed investment by Qatar’s sovereign fund, which had not been previously disclosed, was submitted in order to obtain regulatory approval in China.
The China Securities Regulatory Commission said last week that it had made a decision on May 23 on whether to accept a request from China AMC to transfer a stake greater than five percent within the formal approval process.
The committee did not mention the name of any buyer or seller of the share.
Last week, Chinese President Xi Jinping said before the China-Arab Cooperation Forum in Beijing that his country, which has the second largest economy in the world, seeks to strengthen its relations with Arab countries.
The growing relations come amid a boom in the financial, infrastructure and technology sectors in the Middle East. Securities regulators in Hong Kong visited the Middle East region during the past months to discuss ways to increase capital flows between the Gulf and Greater China.
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If the deal is approved, it would make the Qatar Investment Authority the third-largest shareholder in China AMC, which manages assets worth more than 1.8 trillion yuan ($248 billion) and provides mutual funds and exchange-traded funds to individual and institutional investors.
The China AMC deal would also allow for the long-planned exit of Primavera, the Hong Kong-based investment firm founded by former Goldman Sachs partner Fred Ho.
The Qatar Investment Authority, which manages assets worth more than $500 billion, declined to comment, according to Global S.W.F. Primavera and China AMC also declined to comment.
The China Securities Regulatory Commission has not yet responded to Reuters’ request for comment.
Consolidation of relations
The significant increase in investments by Gulf funds comes against the backdrop of some Western financial companies curbing their investments and ambitions in China amid concerns about its economic recovery and geopolitical risks.
For example, Norway’s $1.4 trillion sovereign wealth fund closed its only office in China last year.
For the Qatar Investment Authority, which aims to become a world-class investment institution as Qatar reduces dependence on oil, the deal will give it access to China’s fast-growing mutual fund industry worth $4.3 trillion.
The head of the sovereign fund said last November that the fund was studying investment opportunities in the retail, healthcare, technology and logistics sectors in China.
It is not clear whether Chinese regulators will approve the Qatar Investment Authority’s purchase of the planned stake, nor how long it may take to make such a decision.
According to sources and company registration information, Primavera owns a stake in China AMC through a Tianjin-based company.
