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The bailout of Kushner building forces Qatar to reorder its investment strategy

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Doha was surprised when media revealed that Qatar took part in helping Donald Trump’s son-in-law, Jared Kushner to bail out his New York skyscraper.

The senior white house advisor, Jared Kushner was the key architect of the Middle east boycott against Qatar after Saudi Arabia accused Doha of sponsoring terrorism.

Kushner Companies’ 666 Fifth Avenue tower which is placed in Manhattan was rescued from financial straits by Brookfield,the global property investor where Qatari government placed investments.

Qatar decided to reorder investing money abroad via its Qatar Investment Authority (QIA) after hearing about the bail out from the media for the first time by avoiding depositing money in funds with no full control over it.

Canada’s Brookfield Asset Management refused to comment although QIA own 9% stake five years ago known as BPY listed in Toronto and New York for $1.8 billion in 2014.

The strategic shift made by QIA last year has a great effects on the global investment simply because QIA has more than $320 billion under management making it one of the world’s largest state investors.

Investing in landmarks as New York’s Plaza Hotel, the Savoy Hotel, Harrods store in London in besides rescuing British and Swiss banks during the 2008 financial crisis are the declared investments that show how QIA poured money into West over the past decade.

666 Fifth Avenue was sold to Kushner Companies with a record at the time for a Manhattan office buildingin 2007 for $1.8 billion considered a drag on his family’s real estate company.

Last August, Brookfield bailed out The debt-laden skyscraper paying 99 years rent upfront according to a disclosed financial terms withing its 99-year lease on the property.

A source close to Brookfield cited that Brookfield is not required to inform QIA in advance.

Doha was shocked not only because of the bail out but also because Kushnerhad is one of the key supporters in Washington of KSA crown prince who rules a regional boycott against Qatar with UAE, Egypt and Bahrain accusing Doha of supporting terrorism.

“There is no upside in investing through funds for someone like QIA. Qatar wants full visibility into where its money goes”, a source close to QIA.

According to a source familiar with QIA’s strategy, Doha may felt it was blackmailed to influence the Trump administration which it doesn’t even tried to do.

QIA will continue investing with Brookfield but with more observation besides not in the same deals.

Big investments still going

Last November, Sheikh Abdullah bin Mohamed bin Saud al-Thani, QIA’s long-serving chief was replaced with Mansour Ibrahim al-Mahmoud, former head of risk management which considered a reshuffle at the top of QIA’s strategic fund.

Sheikh Mohammed bin Abdulrahman Al Thani, Qatar Foreign Minister was named QIA chairman.

“What we have seen lately is that it has have not been placing much. Either they are investing themselves or they are just sitting on a lot of cash”, said a Western fund manager sources money from QIA.

That shift reflects Qatari vision to reduce depending on external investment managers to keep their money under tighter control.

For example, Abu Dhabi Investment Authority said 60 percent of its assets managed by external managers are down to 55% in 2017.Yet, new QIA chief Mahmoud told Reuters that QIA accelerats investment in technology and healthcare in additional to its classic investments in the West such as real estate and financial institutions.

“The instructions from the top are to go out and do big deals,” said a Western banker who held talks with Qatari authorities.

QIA 1.7 billion pounds on real estate in addition to 1.1 billion on infrastructure after promising to invest in Britain with 35 billion pounds ($45 billion) from 30 billion in 2017.

Qatar bought New York’s Plaza besides London’s Grosvenor House hotels in recent months.

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