Qatar will create a new $12 billion investment firm, backed by blue-chip assets from its sovereign wealth fund, and list it on the local stock exchange, its main institutional backer said on Tuesday.
Qatar Holding - the investment arm of the Qatari sovereign fund - said the new firm will invest in assets around the world.
"You name it - shares, bonds, real estate, private equity. We will look at every sector in every country around the world," Hussain al-Abdullah, Qatar Holding's vice-chairman, said at a news conference.
Qatar Holding, believed to have assets in excess of $100 billion, has been the most active of the region's sovereign wealth funds in recent years, deploying the Gulf nation's riches from plentiful natural gas to buy stakes in companies ranging from German sports car maker Porsche to British bank Barclays and Swiss lender Credit Suisse .
"Listing a company of this magnitude will stimulate more wealth distribution down the line. It will give Qataris a chance to be part of the country's growth and will bring in sophisticated foreign investors once it's listed," said R. Seetharaman, chief executive of Doha Bank .
Qatar Holding will transfer $3 billion worth of assets into the new firm, with a similar amount raised in an initial public offering on the Qatar Exchange. A source familiar with the matter said a further $6 billion will be raised at a later date.
"The rationale is very simple. Diversify assets and let the people of Qatar enjoy the state's power in global markets," said a second source familiar with the deal.
"The company will run independently from Qatar Holding," the second source said. "Its board will be represented by Qatar Holding and members from the private sector. Once the board is in place, a new CEO and management will be appointed."
Some bankers expressed doubt over whether the company could be launched as quickly as Qatar hopes.
"The announcement is pretty surprising, and it's a brave move by Qatar. Most of their investments are either bespoke or in listed entities. There is a risk that it may open up their books significantly," a senior banking source in Dubai said.
The IPO is open only to Qataris, but foreign investors will be able to buy in later.
Qatar Holding's investments are widely seen as opportunistic, not following a specific strategy, as it has purchased a wide range of assets globally. Qatar, the world's richest country per capita, has also invested in other Arab states partly to boost its political clout.
The sovereign fund had a rate of return of 17 percent last year, Qatar Holding's Abdullah said on Tuesday.
"This is a global investment company to invest overseas, not in Qatar," he said, adding it planned to guarantee a 5 percent dividend in its first year.
It was not immediately clear which assets would be transferred to the new firm, called Doha Global Investment Company.
The first source said Qatar Holding would spin off $3.5 billion worth of assets into the firm at a discount value of $3 billion.
The assets will include local as well as global assets, the second source said.
Abdullah, who is also a board member of the Qatar Investment Authority, said the listing would take place in six to eight weeks on the Qatar Exchange, which seeks to rival Dubai as a financial hub.
"We don't see an immediate rationale for a move like this, other than maybe sharing the wealth of the nation with citizens, but they have a lot of other companies in petroleum, steel, water treatment which should go (public) first," the Dubai banking source said.
Credit Suisse, in which the sovereign wealth fund owns a 6.2 percent stake, is advising Qatar Holding.
(Additional reporting by Mirna Sleiman and Dinesh Nair in Dubai; Writing by Amran Abocar; Editing by Keiron Henderson and Jane Baird)