The Qatari sovereign wealth fund has agreed to invest in China’s second-largest mutual fund company, according to two sources who spoke to Reuters. This investment underscores Beijing’s growing relations with Middle Eastern countries amid increasing tensions with the West.
In recent years, China has emerged as a major importer of liquefied natural gas from the Middle East, strengthening its ties with Doha as Qatar pursues a significant project to boost production. This trend has led to increased investment from sovereign wealth funds from the Middle East in China, with global SWF reporting that such funds have invested $7 billion in the country since June of the previous year.
The Qatar Investment Authority (QIA), the country’s sovereign wealth fund, will purchase a 10% stake in China AMC from investment company Primavera Capital for an undisclosed amount. While financial details of the deal were not disclosed by the sources, Chinese brokerage CITIC Securities had previously announced its decision to forgo the right to purchase the 10% stake in Primavera for at least $490 million.
The sources requested anonymity as they were not authorized to speak to the media but revealed that if approved by regulatory authorities, QIA would become the third-largest shareholder in China AMC, managing assets worth over 1.8 trillion yuan ($248 billion). The potential deal with QIA would facilitate Primavera’s long-planned exit from China AMC, anticipated by founder Fred Ho, a former Goldman Sachs partner. However, it remains uncertain whether Chinese regulators will approve QIA’s purchase of the stake and how long it will take for a decision to be made.
China Securities Regulatory Commission disclosed that a decision was made on May 23 regarding China AMC’s request to transfer a stake greater than 5% within formal approval process.
Primavera currently holds a stake in China AMC through a Tianjin-based company, as indicated by sources and company registration information.
Overall, this investment underscores Beijing’s growing relations with Middle Eastern countries and highlights the increasing importance of these relationships for both countries involved.
