Qatar revamps investment approach after Kushner building bailout

LONDON/NEW YORK/DUBAI (Reuters) – When news emerged that Qatar may have unwittingly helped bail out a New York skyscraper owned with the aid of the own family of Jared Kushner, Donald Trump’s son-in-regulation, eyebrows were raised in Doha.

Kushner, a senior White House adviser, was a close ally of Saudi Crown Prince Mohammed bin Salman – a principal architect of a local boycott against Qatar, which Riyadh accuses of sponsoring terrorism. Doha denies the price.

Brookfield, an international property investor wherein the Qatari government has located investments, struck an ultimate deal yr that rescued the Kushner Companies’ 666 Fifth Avenue tower in Manhattan from financial straits.

The bailout, in which Doha played no part and first learned approximately within the media, has caused a rethink of how the gas-wealthy country invests cash abroad through its sizeable sovereign wealth fund, two resources with an understanding of the problem informed Reuters.

The country has determined that the Qatar Investment Authority (QIA) will intention to keep away from putting money in the price range or other investment motors it does no longer have full manage over, in keeping with the sources, who are familiar with the QIA’s approach.

“Qatar commenced searching into how its name was given concerned into the deal and determined out it became because of a fund it co-owned,” said one of the resources. “So QI in the end caused a method to revamp.”

A QI spokesman said: “QI had virtually no involvement inside the 666 Fifth Avenue development and the claims about QIA’s investment strategy aren’t authentic. There has been no exchange in funding method almost about taking majority manage.”

The QI did not cope with different detailed questions from Reuters along with approximately its destiny investments through funds and any preference to have more control over the one’s cash flows.

Canada’s Brookfield Asset Management Inc bailed out 666 Fifth Avenue via its actual property unit Brookfield Property Partners, wherein the QI acquired a 9 per cent stake 5 years in the past. Both discern and group declined to remark.

The QIA’s strategic shift changed into made overdue remaining year, in step with the sources. It gives a rare perception into considering one of the world’s maximum secretive sovereign wealth budget.

The revamp ought to have significant implications for the worldwide investment scene because the QI is one of the world’s biggest state investors, with greater than $320 billion underneath management.

The wealth fund has poured cash into the West during the last decade, which includes rescuing British and Swiss banks for the duration of the 2008 monetary crisis and making an investment in landmarks like New York’s Plaza Hotel and the Savoy Hotel and Harrods save in London.
QATARI BOYCOTT

Kushner became the chief government of Kushner Companies while it obtained 666 Fifth Avenue in 2007 for $1.8 billion, a record on time for a Manhattan office constructing. It has been a drag on his family’s real estate agency ever when you consider that.

The debt-encumbered skyscraper was bailed out by Brookfield remaining August, when it took a 99-12 months to hire on the assets, paying the rent for 99 years prematurely. Financial phrases had been no longer disclosed.

The QI offered a 9 percentage stake in Brookfield Property Partners, which is referred to as BPY and is listed in Toronto and New York, for $1.8 billion in 2014.

BPY has approximately $87 billion in assets, a part of more than $330 billion controlled by way of its figure Brookfield. The stake buys through QI become in keeping with its method to boost investments in top U.S. Belongings. The investment gave QI no seat at the board of BPY.

The Qatari wealth fund was no longer concerned within the 666 Fifth Avenue deal, a source near Brookfield Asset Management advised Reuters. There changed into no requirement for Brookfield to tell the QI ahead.

The rescue rankled with Doha, according to the two assets familiar with the QIA’s strategy, because Kushner – married to U.S. President Trump’s daughter Ivanka – had long been one of the key supporters in Washington of the Saudi crown prince, who is the king’s preferred son and inheritor to the throne.

Prince Mohammed became a high mover in central nearby states to severing links with its neighbour Qatar and embargoing the small country when you consider that mid-2017. Saudi Arabia, the United Arab Emirates, Egypt and Bahrain accuse Qatar of sponsoring terrorism. Doha denies the allegation and says the other countries surely need to strip it of its sovereignty.

“There is not any upside in investing via price range for someone like QI. Qatar needs full visibility into in which its money is going,” said the second one supply acquainted with the QIA’s approach.

He delivered that one of the motives for Doha’s issues approximately the deal changed into that it might have been visible as an attempt by Qatar to persuade the Trump administration, which becomes now not the case.

The QI will not wind down existing investments with Brookfield or others, however, will as an alternative not invest in similar offers, according to the two assets.

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