Any possible recession will be ‘mild’: CEO of Qatar Investment Authority

A general view of the skyline from Doha Corniche on March 31, 2022.

Nick Potts – Foot Image | Getty Images

The CEO of Qatar’s Sovereign Wealth Fund believes that it will be “light” if the world sees a recession.

Rising fears of a downturn in China due to the Cowid-19 shutdown, rising interest rates and the cost of living crisis affecting investor sentiment, pushed US stocks briefly into a bear market on Friday.

Mansour Al Mahmoud, CEO of the Qatar Investment Authority, told CNBC’s Hadley Gamble: “The worst case scenario we’re talking about is the sell-off.

The QIA, which manages $ 450 billion in assets, ranks as the ninth largest sovereign asset fund in the world, according to the Sovereign Wealth Fund Institute.

Al-Mahmoud said he was “less pessimistic” about the current state of the world economy, despite recovering from the epidemic. The CEO added, “We are in a good position in terms of the banking sector which has a good balance sheet, we have good liquidity,” the CEO added. “I’m not saying we won’t have a recession, I’m not saying we can’t have a recession, but if we do have a recession, it will be a mild recession.”

Qatar is helping to transform Europe’s power

As Germany seeks to free itself from Russian power, Chancellor Olaf Schulz welcomed Doha’s important role in the transition to Berlin, agreeing to a “power partnership” following the Emir’s visit. Qatar aims to start supplying LNG by 2024.

The QIA chief told CNBC: “We cannot stop investing in Europe, we will help them change their energy. Of course, this year, they may have difficulties because (energy) prices are not helping Europe grow.”

He also welcomed Germany’s push for renewable energy sources, saying “they are very advanced in their transformation.”

Despite QIA’s commitment to Europe, the fund is not sure whether investments will see an immediate return to the current energy crisis, relying on growth. “I am very excited about Europe in about three to five years,” said Al Mahmoud.

An epidemic next strategy

The QIA, once focused on trophy assets such as shares of the London Stock Exchange and the Grosvenor House Hotel, has shifted its focus from post-epidemic to more investment in technology.

A subsidiary of QIA is contributing $ 375 million to buy Elon Musk’s Twitter account, according to official documents released May 5. The takeover is currently on hold. The QIA chief did not comment on the Twitter deal, but welcomed Musk’s leadership.

The fund also has significant agreements with Moscow. QIA has সম্প 9 billion worth of assets in Russia, including shares of St. Petersburg Airport and Russian energy giant Rosneft.

Al-Mahmoud told CNBC that the fund was “investing”, adding that the QIA was “in full compliance with international sanctions” and that “we have a small exposure in Russia compared to our overall portfolio.” The fund, al-Mahmoud says, has no plans to invest more in Russia.

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