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00:00Very good to be speaking with you, Your Excellency.
00:03Your first live speaking engagement since you took on the role,
00:06so it's really good to be talking to you.
00:08So given this is your first sit-down with us in a televised format,
00:14I just want to start with your vision for the funds.
00:18Walk us through what you were planning for QIA
00:21and potentially how it differs from what it was doing in the past, if not at all.
00:26First of all, thank you for having me
00:27and I'd like to share some of the views on QIA.
00:30So first of all, we're very proud of what we do.
00:33We believe it is really investing for good.
00:35The vision of QIA is to accumulate and grow the net worth for the funds
00:40to ultimately be able to add and contribute back to the state and future generations.
00:45It's a very noble goal to start with.
00:48Also, it's a very big ship.
00:50So as we steer the ship, it makes a lot of sense from time to time
00:54to revise and think about what you're doing and how to improve it.
00:58Especially when you think of markets that are very complex
01:00and environments that are ever-changing.
01:03I wouldn't say really we have major movements or strategic movements for the fund.
01:10I think we have a very strong fund and have been in it for 15 years.
01:14But I think with time, we're increasing our pace when it comes to specializations,
01:18which areas, which priorities to focus on
01:21and how do we invest in human talent internally.
01:24So we have the best human talent and the best strategic and agility
01:28to be able to continue to become an outperformer in markets
01:32that are quite complex to navigate through.
01:35Last week, you made the announcement that QIA are looking to invest $500 billion
01:41in the U.S. over the next decade.
01:44So quick, back-of-the-envelope math, that's about $50 billion a year
01:48if you just divide by 10.
01:49Before I ask you about what those investment opportunities are,
01:52how does that figure actually compare to what QIA was investing in the U.S.
01:56in prior years?
01:57It increases the pace for sure.
02:00So I think some years probably increases by double
02:03and some years probably by more than double
02:05what we've been doing for the past five or six years.
02:10As you know, His Highness indicated openly
02:14that a lot of the additional reserves sales
02:18that's coming from the LNG expansion
02:19will be routed to the Future Generations Fund.
02:23And since we're a beneficiary of that guidance,
02:25it's very important for us to think organically
02:27how do we grow.
02:29And U.S. is 60% of the available trading markets in the world.
02:34So it makes sense that most of it will go to the U.S. market.
02:37We also believe in the robustness of the U.S. systems,
02:40the growth perspective that the U.S. enjoys.
02:43So we'll continue to be there.
02:44But it's definitely a major uplift.
02:46So part of the key mandates that we have now in QIA
02:48is how do we prepare ourselves and systems
02:51to be able to grow systematically significantly in size,
02:55both in terms of people,
02:56but more importantly in terms of how do we continue to be
02:58and thrive to become a very excellent investor in those markets.
03:05Yeah.
03:06On that note...
03:06But it's a major uplift for sure.
03:08It is a major uplift.
03:09And it's a huge amount of quantum of capital.
03:11What our evaluation now is that how do you position ourselves,
03:15how do you become efficient investors,
03:17and what areas and themes to focus on.
03:19Yeah.
03:20I'm going to ask you about that.
03:21Let me just bring up the poll results
03:22because we asked the audience to get involved with this.
03:25So will U.S. exceptions in trade make a comeback this year?
03:28Only 54% of people say yes.
03:31The rest say no.
03:33So not everyone is as optimistic on a relative basis
03:37as some of the other people that we've spoken to in the room.
03:40Let me ask you from QIA's perspective,
03:43and of course you have a more long-term view on the U.S., obviously.
03:46Where are the areas that you want to get involved in in the U.S.?
03:50What are the biggest themes you're interested in right now?
03:53There are themes, I would kind of classify them.
03:58It's a very generic question,
04:00but if I make it a little bit narrower
04:02and think about the U.S. and major industries within the U.S.,
04:06they tie in global themes as well.
04:09So one of the key themes we're spending a lot of time on
04:12is digitalizations in areas that add value.
04:16So as you think of digitalization,
04:18and AI is definitely in the center of it,
04:20and we're looking for how do we spend time
04:23in which industries do you invest in,
04:26digital investors becoming more and more digital,
04:28or AI-enabled,
04:30that actually adds value to economic growth.
04:33And this, we think, could be time,
04:36because you have a strong hardware power
04:38and you have a strong software power, as we see,
04:41and it's accelerating significantly.
04:43But a very important, another element,
04:45which is changes in demographics.
04:48More AI-enabled softwares and applications
04:51may improve the people's lives.
04:53And actually increase productivity
04:55in times where demographics are decreasing
04:58everywhere around the world.
05:00So this, I would say, is a major theme.
05:01So digitalization and AI-related technologies.
05:05And we think of it technology,
05:06but in reality, a lot of the businesses coming up
05:09and claiming to be technologies
05:10that are actually cannibalizing
05:11a lot of traditional businesses.
05:15A second very important area,
05:16which is also U.S. is a big part of it,
05:19given the current policies
05:21that the administration is pushing for,
05:24is how do we think of the world
05:26from a globalization to deglobalization
05:30or fragmented economies.
05:32And if you look into the data
05:33over the past 20, 30 years,
05:35this has already been happening.
05:36So to share some stats,
05:40the U.S. amount of trades with China
05:42was about 20%, 22%,
05:48if you think of 2018 or so.
05:51This year is around 13%.
05:53So it's a major reduction
05:55of the amount of trading relationships
05:57and capital on goods
05:59between China and the U.S.
06:00And if you look at it
06:02from a different perspective,
06:03so if you ask and say,
06:05what is emerging markets
06:06doing with each other,
06:07you'll notice a significant increase
06:08in amount of trades.
06:10So another important element
06:12to the U.S. is
06:13how do we take advantage
06:16and position ourselves
06:17on the areas of supply chain
06:19reconfigurations
06:20in light of also
06:22what's happening with the U.S.
06:23around trades
06:24and encouraging establishing trades.
06:26Also, if you look into the data
06:27in the U.S.,
06:29I cannot recollect exact years,
06:32but I think probably
06:32toward the late 90s
06:34or mid 90s,
06:3530% of the U.S. GDP
06:37was attributed
06:38to industrial activities,
06:39while now it's around 10% or so.
06:42Yeah.
06:42So the U.S.,
06:43in addition to supply chain
06:44configuration and trades,
06:47logistics and ports
06:49and things of that sort
06:50of infrastructure,
06:51you also may have a need
06:52for further industrialization
06:53within the U.S.
06:54in a world
06:55that will become
06:56a little bit more
06:57kind of globalized.
06:59The third area,
07:00which is not really a theme,
07:01but I think
07:01there is a lot of things
07:02changing on the correlations
07:05and underlying risks
07:07of various parts of the markets.
07:12So as you've seen,
07:13there is a significant reduction
07:15in terms of high level of volatility
07:17and significant reduction
07:18at some points
07:19between the correlation relationship
07:20between equities and bonds,
07:22for example.
07:22In a world
07:24where there is more
07:24also, again,
07:25trade and related
07:26and things of that sort,
07:27you expect to see more
07:28foreign currency volatility,
07:31more interest volatility.
07:33So the third one,
07:33I would say,
07:34more tactical.
07:35So one is around
07:35digitalization and technology.
07:37It's a key aspect
07:38across industries.
07:39The second one
07:40around supply chain
07:41in a new world.
07:43The third one is around
07:44how do you become
07:45tactically aware
07:46and agile
07:47when it comes to your portfolio
07:48and asset management policies.
07:50Well, let me ask you
07:51about your tactical allocation
07:52and are you reducing
07:53exposure to any asset class?
07:56We are thinking hard
07:58in terms of underlying risks.
08:01So the interest rate environment
08:03was much higher
08:04the past few years.
08:07Now we're thinking
08:07is how much should we allocate
08:09to fixed income,
08:09for example.
08:10Interesting.
08:11In a world where
08:12there is a lot of challenges,
08:14you may end up investing
08:15in businesses
08:15that are not necessarily
08:16fixed income
08:17or credit related,
08:18but they have similar attributes
08:20and could offer you
08:22more growth.
08:23So to answer your question
08:24tactically,
08:25I think we're revising
08:26very deeply
08:27how much we should have
08:28in fixed income
08:29as a conservative asset class.
08:31And we're thinking
08:31very deep also
08:32of some of the traditional
08:33asset classes
08:33that we have
08:34and whether we need
08:35to increase
08:36or decrease
08:36some of those
08:38asset classes as well,
08:39like infrastructure
08:39and real estate.
08:42Let me ask you
08:43a question about your AUM
08:44because
08:45His Excellency
08:47earlier in the morning
08:48talked about
08:48the fact that
08:49new inflows
08:50are going to be coming in.
08:51What is your expectation
08:53for how big
08:53the fund is going to be
08:54by 2030?
08:56We haven't run
08:57the final model,
08:58I'll be very honest
08:59with you.
09:00Roughly?
09:01We haven't run
09:01the model,
09:02honestly.
09:03I don't really have
09:03the exact number.
09:05Also,
09:05it will be bad
09:05because they may see
09:06a number
09:07and then underperform
09:08as a fund
09:09and not meet it
09:10because it would have
09:11to come from
09:12two factors.
09:13First,
09:13investing wisely
09:14to outperform
09:15and get there
09:16and then the inflows.
09:17So I don't want to
09:18hold myself accountable
09:19for underperformance.
09:20Okay,
09:20but assuming that
09:21the fund continues
09:22to grow in size,
09:23which I think
09:23is a fair assumption,
09:24we don't have to
09:25pin down a number,
09:26is that going to
09:27change the way
09:28you invest
09:29because you will
09:30have to invest
09:32for opportunities
09:32that can give you
09:33scale?
09:35Definitely.
09:36So QI performance
09:37has been strong
09:38and we expect
09:39with some of the things
09:40we're doing internally
09:41for it even to be stronger.
09:44We strengthen it
09:45through specializations
09:46and focusing
09:47on the right areas
09:48and constantly revising
09:49and thinking about
09:50our asset allocation policy.
09:52But as the fund size
09:53grow in size,
09:56we're also,
09:57this will push us
09:58to have even longer
09:59duration on the portfolio
10:00so we can take
10:01longer-term bets
10:02and themes
10:03and industries
10:04and specific technologies
10:06or other businesses
10:08and take advantage
10:09of the liquidity premium
10:10to underperform.
10:11So I don't expect
10:12major change in the style,
10:15but I think it will be
10:15more refined
10:16and we'll focus on areas
10:18to take advantage more
10:19of our ability
10:20to have a larger fund
10:21and also think
10:22of longer duration.
10:23Fair to say,
10:24perhaps a bigger emphasis
10:25on direct investments
10:27than in the future?
10:29That is in Qatar,
10:30you mean?
10:30Yes.
10:31I mean,
10:31we already have,
10:32we have a good emphasis
10:33on direct investments.
10:34A lot of the partners
10:35we have have been
10:36and think of globalization.
10:39A lot of them
10:39think about supply chain solutions,
10:42decentralizing industries.
10:44So from our mandates,
10:45it's our responsibility
10:46to pass them along
10:47and be the kind of,
10:49the, you know,
10:49holding the hand
10:50and try and introduce them
10:51to the domestic stakeholders
10:53to encourage them
10:55to think of Qatar
10:55as a destination.
10:56And starting as an investor
10:58is also good
10:58because they've seen
10:59when we promise,
11:01we stick to our words
11:02and we stand beside
11:03our partners
11:03in good time
11:04and difficult times.
11:05So it resonates
11:06when they think
11:07that you're inviting them
11:08to have business in Doha.
11:09Yeah.
11:10More and more funds
11:11have been looking
11:12into opportunities
11:13in private credits
11:14and maybe I should link
11:15that back
11:15to what you were saying
11:16about fixed income
11:17and finding opportunities
11:18between public and private.
11:21In that space,
11:22do you think
11:22it has become
11:24more challenging
11:24to find decent
11:25investment opportunities
11:26simply because
11:28so many funds
11:28have an interest
11:29in those assets?
11:30It's definitely
11:30a crowded market
11:31compared to seven
11:32or eight years ago.
11:33We started in scale
11:35in the United States,
11:36I would say,
11:36six, seven years ago
11:38when we thought
11:39it was an interesting time.
11:41And COVID enabled us
11:42also to do more.
11:44It's becoming
11:44a very crowded market,
11:46I would say.
11:47And the other problem
11:48with private credit
11:49is you may underwrite
11:50a private credit
11:51thinking it's actually
11:52a credit piece,
11:53but when issues come by
11:55you realize
11:55it's more writing.
11:57So our strategy
11:59when it comes
12:00to private credit
12:00is to focus
12:01managers
12:02and to go with scale
12:04and many times
12:06actually be
12:07on a pilot seat.
12:10So we have
12:10kind of an SMA
12:11accounts with a lot
12:13of the managers
12:13we have
12:14so we can put the dial
12:15which is more risk
12:16or less risk.
12:17I'm very proud
12:18of the team we have
12:19also in QIA
12:19doing that.
12:20Yeah.
12:21Earlier on
12:22we were talking
12:22about one of the
12:23thematics
12:23and that is
12:24digitalization.
12:25Artificial intelligence.
12:26Interesting that
12:27when President Trump
12:28was in the region
12:28last week
12:29many partnerships
12:31and deals
12:31were announced
12:32and I wonder
12:33whether that's
12:34also an avenue
12:35for QIA
12:36to be involved
12:37too
12:37in terms of
12:38securing
12:39and working
12:40with US companies
12:42for the advancements
12:43of AI technology
12:44in the region
12:44and in Qatar.
12:45Yeah.
12:46We've been
12:46investing extensively
12:48a lot in the US
12:49extensively.
12:49so we started
12:50investing in
12:51data centers
12:52and some of them
12:52in the AI
12:53in hyperscales
12:54space
12:54about 10 years
12:55ago.
12:56So when we
12:56started originally
12:57we were hesitant
12:58really about
12:59the AST class
12:59when we developed
13:00familiarity
13:01after a couple
13:02of years
13:02we did
13:03deploy in size.
13:04I'll tell you
13:05we're very happy
13:06with what we've
13:06done early
13:07because those
13:07things are
13:08very valuable
13:08now.
13:09Because when you
13:09do things
13:10early
13:10you have the
13:11ability to
13:12negotiate
13:13better terms.
13:14So we've
13:14been have access
13:15to a lot of
13:16assets in the US
13:17overall we've
13:18invested
13:18and have
13:19exposure to
13:20about 5
13:21gigawatts
13:22as a QIA
13:23and we've
13:24done it
13:24systematically
13:25with discipline.
13:27When it
13:27comes to
13:28AI
13:28which is
13:29the applications
13:30on top
13:30we've also
13:31been active
13:32both in
13:33the hardware
13:33both in
13:34the infrastructure
13:35software
13:36so we've
13:36invested this
13:37year a
13:37significant ticket
13:38500 million
13:39in Databricks
13:40and also
13:41we've been
13:41also active
13:42on application
13:43in the
13:43application size.
13:44We've been
13:44hesitant to
13:45come to
13:45the application
13:46size of
13:46things for
13:47a while
13:47but have
13:48been quite
13:48active this
13:49year as
13:49things
13:50materialize.
13:51We also
13:52invested
13:52significantly
13:53on XAI
13:54we thought
13:54they have
13:55a superb
13:56focus on
13:57a fully
13:57integrated
13:58system
13:58and solution
13:59so we've
14:00been active
14:00from last
14:01year and
14:02we also
14:02redeployed
14:03again with
14:03them this
14:03year.
14:04So we've
14:04been active
14:05in the US
14:06we also have
14:07a good track
14:07record.
14:08I think
14:08one of the
14:08things with
14:09the Mr.
14:09President
14:10Trump
14:10policies
14:10is encouraging
14:11as a lot
14:12of people
14:12are trying
14:12to encourage
14:13investors to
14:14come to
14:14the United
14:14States
14:15and I think
14:16they came
14:16to the
14:16realization
14:17that capital
14:18coming from
14:19an entity
14:19like UIA
14:20or Qatar
14:20is a very
14:21welcomed capital
14:22because it's
14:23quite commercially
14:24driven
14:24and speaks
14:25to the same
14:26values.
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