Barclays' PE tie-up with Qatar eyes Asia assets
A new collaboration between Qatar Asset Management Company (QAMC) and Barclays Natural Resource Investments (BNRI) will make private-equity purchases of energy and mining assets in Asia and elsewhere.
State-owned QAMC, set up by the Qatar Financial Centre Authority and sovereign wealth fund Qatar Investment Authority, will co-invest $250 million in BNRI’s current and future portfolio companies. The fund manager has not ruled out further capital injections in the future.
The deal also sees BNRI, part of the UK’s Barclays Bank, set up an office in Doha, its first outside London and New York. The firm will put as many as eight investment executives there within the next year, by relocating and adding locally.
The transfers will include Freddie Lee, head of investor relations, and Mark Brown, head of BNRI, which has 16 investment staff globally.
Barclays has had an operation and licence in Doha via the QFC for a number of years. It has corporate, investment banking, wealth and investment management businesses there, and BNRI provides an extra capability.
BNRI has an existing $2.1 billion portfolio of companies, 15-20% of which is invested in Asia, across three portfolio companies, such as Malaysia’s Nio Petroleum. Brown also points to BNRI’s relationship with the Korean government, as well as partnerships in Hong Kong, Singapore and elsewhere in Asia.
“Asia is also an important part of our business model for exits from deals as well,” he adds, “because the region is a hungry user of underlying commodities that our investee businesses produce.”
Lee says it is too early to commit to putting people on the ground in Asia, although given the importance of the region to the firm he did not rule it out.
BNRI has more than 10 other investment partners including fund managers, ultra-high-net-worth individuals and sovereign wealth funds, many of which are based in Asia, says Brown, describing the Qatar deal as a “natural progression”.
BNRI largely focuses on the upstream oil & gas and mining sectors, and to a lesser extent on power and renewables. It starts the lifecycle of an investment by identifying a strong management team, then seeks assets for them to manage, turning the typical “asset-led” approach on its head.
Barclays chose to partner and set up in Qatar for a number of reasons, says John Vitalo, the bank's CEO for the Middle East & North Africa. One is its good transport infrastructure and geographic location in the midst of the regions where BNRI invests, including Africa, Asia, Europe and South America. Another is Qatar’s “first-class” commercial, legal and regulatory framework.
The deal also fits well with Qatar’s strategy of looking to attract asset managers by offering seeding programmes in addition to the benefits already highlighted by Vitalo.
Shashank Srivastava, acting CEO of the QFC Authority, notes this is part of its strategy to support the build-out of the asset management industry in the country, adding it is the first of several planned seeding partnerships with local, regional and global firms.
QAMC is talking to other asset managers – from private equity to traditional fund houses – as potential partners, but declined to specify a likely timeframe for when further deals might happen.
There’s currently no commitment to invest more than $250 million with BNRI, says Srivastava, but if appropriate opportunities come along, QAMC may consider doing so.