India will be the next big thing for electric vehicles, a sector in which Qatar Investment Authority is very keen to deploy more capital, a top executive the Middle East fund said.
Innovation in any sector is very important for QIA and more recently, “the electric vehicle (EV) space is where we have been investing a lot,” said Abdulla Al-Kuwari, head of Asia-Pacific investments at Qatar Investment Authority (AIQ) Advisory at the 10th Milken Asia Summit in Singapore.
Al-Kuwari is based in Singapore and QIA Advisory is the Asia arm of the Middle East sovereign wealth fund.
QIA is the world’s 10th largest SWF, according to the Sovereign Wealth Fund Institute. The wealth fund was set up in 2005 to effectively manage Qatar’s revenue from liquefied natural gas.
The fund is an active investor in Asia.
QIA, along with heavy other heavyweight investors such as Blackrock, in May invested $908.7 million investment for a minority stake in SK On Co., the world’s fifth-largest battery maker and based in South Korea,
“China is one of the biggest markets for us in terms of energy transition. They are ahead of many markets in this space. India will likely be the next one in the EV space for us to deploy capital,” Al-Kuwari said.
India’s EV market will grow with a CAGR of 49% between 2022 and 2030, with 10 million annual sales by 2030, according to the Indian Economic Survey 2023 by India’s finance ministry.
India reached a major milestone of 1 million EVs sold in 2022, with electric two-wheelers accounting for a major share of those sales.
Other international companies have also been stepping up their EV commitments in India.
British Petroleum has made two investments in India in the last six months, both in electric vehicle startups. In April it backed EV delivery company Magenta in April and backed the $42m fundraising round of BluSmart Mobility, an EV-only ride-hailing company, in May.
South Korea’s Hyundai Motor also earlier this year said it plans to invest about $2.5 billion in the EV sector over the next 10 years in India.
Taiwanese contract manufacturer Foxconn also recently announced its plan to set up a production line for two-wheeler EVs in India.
India’s retail sector is also of high interest to QIA. The fund invested $1 billion in Reliance Retail Ventures, a unit of a business conglomerate controlled by Indian billionaire Mukesh Ambani. “In India, we believe in the retail space,” said Al-Kuwari.
Image credit: Shutterstock
QIA set up its Singapore office in 2021 to gain access to Asia’s largest companies and investors. “We build an on-the-ground team for every country that is important to us and look for long-term partners in there,” he said.
Some of the themes that QIA is currently working on with partners include “the growth of retail markets over the next five to 10 years, technology becoming very big in the Asia region, and the growth of new economy real estate.”
New economy real estate refers to real estate that benefit from ‘megatrend’ technologies and innovations.
Examples include the buildings that house internet and bio-life science technology research entities and laboratories, communication towers that transmit data, and the properties involved in logistics, especially related to e-commerce.
One example of that kind of investment: QIA was part of the $150 million funding round for India’s logistics and warehousing player IndoSpace Logistics Parks IV (ILP IV) that was announced in September.
Healthcare innovation is another appealing area of opportunity. “We look at innovation in the healthcare and pharma sector… the biotechnology sector is a big market for us,” says Al-Kuwari.
QIA invested $45 million in a series B funding round for Chinese biotech company Oricell Therapeutics in February.
MORE PRIVATE CREDIT
While QIA has been investing in US and European private credit, Al-Kuwari said the fund is now looking to Asia to invest in this space.
“We either invest directly or with a partner or side-by-side with a local sponsor. We try to find local partners in each of the countries for private credit. So, for example in India, we have a local partner and we have been doing private credit in real estate for many years and we are going to continue doing so. Overall, when we look at a specific company to invest in, usually it is an existing partner of ours.”
These companies have be ones the fund knows very well, have good business models and need risk capital, he added.