Qatar's $60 billion sovereign wealth fund is looking at possibly buying into financial services and construction companies in the United States and Europe, a person familiar with fund said on Monday.
The Qatar Investment Authority also plans to use its stakes in the London Stock Exchange (LSE.L: Quote, Profile, Research) and Stockholm-based OMX AG (OMX.ST: Quote, Profile, Research) to develop its own capital markets, and sell shares in its exchange to the public, said the person, who asked not to be identified.
"We are in research and analysis mode," said the person. "The US, Western Europe and the UK market have seen revaluation ... the financial and construction sectors have experienced significant downturn."
Gulf Arab investors, including Saudi Prince Alwaleed bin Talal and Kuwait, have been at the centre of rescue packages for Western lenders such at Citigroup Inc (C.N: Quote, Profile, Research) and Merrill Lynch & Co (MER.N: Quote, Profile, Research), hit by write-downs over their home loans business.
Kuwait agreed last week to invest $5 billion in Citigroup and Merrill Lynch.
Qatar owns 15 percent of the LSE, and almost 10 percent of Nordic and Baltic bourse operator OMX, vying with Dubai which bid to take over OMX and later agreed to sell it to Nasdaq Stock Market Inc (NDAQ.O: Quote, Profile, Research) for a share in the combined company.
"Our interest in the LSE is to work on a long-term relationship to help develop the DSM and Qatar's capital markets," said the person of the Doha Securities Market, the Gulf's fourth-largest exchange.
As part of its September deal with Dubai, Nasdaq agreed to take a 33 percent stake in the Dubai International Financial Exchange, renaming the bourse Nasdaq-DIFX and allowing Dubai to use the Nasdaq brand and technology across North Africa, the Middle East and South Asia.
Qatar, with a population of 1 million and holder of the world's third-largest natural gas reserves, is looking to use its petroleum wealth to diversify its economy. Standard Chartered puts the value of QIA assets at $60 billion.
"Qatar needs to have total capital market infrastructure, and an exchange that can handle cash, derivatives, clearing systems... with the best out there," said the person. "That requires strategic partnership to attract them to Qatar."
"The DSM needs to be converted into a private company," said the person. "The leadership wants to allow Qatari citizens and investors to share in it."
The QIA in November dropped its 10.6 billion pound bid for J.Sainsbury's (SBRY.L: Quote, Profile, Research), Britain's third-largest supermarket group.
"The credit markets were no longer offering terms to make the investment meet the criteria," said the person. "If you are leveraging to take 100 percent into the company then you have to be guided by credit markets."