Global goals fuel Qatar's ambition

Qatar is becoming a potent financial force far beyond the gas fields that power its wealth. The football world is just one example through the likes of Paris Saint-Germain.

Qatar has invested heavily in Paris Saint-Germain and one of their targets in LA Galaxy's David Beckham. (AP Photo/Jae Hong)

The emirate's sovereign funds are flexing their muscles and investing in established institutions, from football to high finance, writes Colin Randall, foreign correspondent

Qatar:

More than just gas, gas, gas Global portfolio that will only grow bigger. Learn More

When Paris Saint-Germain began the French football season full of the expectation that hefty Qatari investment brings, Antoine Kombouaré, the coach, asked to be judged after five games as his team promptly stumbled to defeat on the opening day.

A look at the Ligue 1 table three months later, with PSG in first place unless last night's results produced shocks, vindicates his plea for patience, and also the notion that investment in sport is generally matched, sooner or later, by achievement.

The performances may not quite top those of Manchester City, now repaying the immense backing from Abu Dhabi with swashbuckling successes in the English Premier League including the stunning 6-1 win last month against fierce local rival Manchester United at Old Trafford.

The early signs, all the same, are that the Qatari-propelled transformation of PSG will give France's capital city the league title for the first time in 17 years. The honour would be especially sweet for Kombouaré, who won his one championship in the PSG team of 1994.

What this early promise does for PSG is obvious. Suddenly, a club that had become accustomed to gross underachievement, noted more for the behaviour of its hooligan element than for anything done on the field of play, is up there with the big boys of European football. PSG was able to spend €42 million (Dh212.7m) on Javier Pastore, a relatively unsung Argentinian player, in the hope that he might become a star, a hope that his goals and creativity have started to justify.

And what it does for the Qatar Investment Authority (QIA) and its Qatar Sports Investment subsidiary, involved in the acquisition of 70 per cent of PSG, is also evident.

It gives the wealthy Gulf state another chunk of international pride and muscle. The attempts to lure David Beckham, 36, to Paris show there is a business plan, too.

Who better to sell replica shirts than one of the world's most famous and idolised footballers? If French media reports are accurate, an advance order of 20,000 has been placed. Nasser Al Khelaifi, the PSG president, who already hails Pastore as the "new Lionel Messi", has confirmed the club's hopes of recruiting Beckham with widely quoted acclaim for a man who "goes beyond the sport" as an ambassador, brand and example to others while remaining "a very good football player whose age is not a problem".

Qatar's progress in establishing itself as a potent financial force, far beyond the gasfields that power its wealth, has been extraordinary.

Football clubs and their supporters talk about "marquee buys" and, in six years, Qatar has followed the example set by Abu Dhabi and Dubai and assembled a bulging portfolio of the business equivalent.

Qatar's sovereign fund has moved money generated by those ample resources into non-energy activities in the US, Europe and Asia, minimising exposure to the fluctuation of oil and gas prices and establishing a stake in a wide range of sectors.

Acting on behalf of its owner, the QIA, Qatar Holding already had stakes in banking and the London Stock Exchange, top-of-the-range shopping, luxury hotels, telecommunications, food, high-profile property investment, car manufacturing and supermarkets. Household names in which the authority has taken stakes include Harrods, Sainsbury's, Porsche and Volkswagen.

Separately, but reinforcing Qatar's place on the map, the Qatar Foundation, a government-owned education, science and community body, has a five-year, £125m (Dh735.9m) shirt sponsorship deal with Barcelona, the European Champions League titleholder.

Meanwhile, Malaga, a less vaunted Spanish La Liga club, is owned by Sheikh Abdullah bin Nasser Al Thani, a member of the Qatari ruling family and a distant cousin of the emir, Sheikh Hamad bin Khalifa Al Thani.

There have also been persistent whispers that Qatar has eyes on Manchester United.

"The idea of having commercial links with Barcelona and Man United, arguably the two most famous clubs in the world, must be very tempting," says Kristian Coates Ulrichsen, a research fellow in the department of government at the London School of Economics and a specialist on Gulf politics. "The interest has been denied and the Glazers [the American owners of United] have said they will not sell, but the rumours refuse to go away."

Still, on a footballing theme, no one will forget the chilly day in Zurich last December when Qatar's audacious bid to stage the 2022 Fifa World Cup triumphed despite powerful competition, notably from the US and Australia. Mr Coates Ulrichsen says this, for a country with no real football heritage, is a formidable achievement, due in some measure to painstaking groundwork, including training schemes for young African and Asian players.

The list could go on. And it does, in striking fashion with the recent addition of gold reserves in Greece, a country whose crippling debts have made it the lamest of all Europe's lame ducks. The US$775m (Dh2.84 billion) deal gives Qatar Holding a 9.9 per cent stake in European Goldfields with additional warrants and options that will increase its holding to 30 per cent and eventually make it the major shareholder.

Qatar Holding says the commitment "includes funding support for capital expenditure to develop gold deposits in Greece". It adds: "The existing resource portfolio includes an operating mine in Greece, as well as three significant deposits in Greece and Romania. Taking into account all reserves and deposits in place, European Goldfields has total gold equivalent resources estimated at 24 million ounces."

Ahmad Mohamed Al Sayed, the managing director and chief executive, said: "Our latest investment helps to further diversify our investment portfolio in the commodities sector, with a specific position in gold resources and another long-term partner secured for the future."

And observers of Greek economic woes will have paid heed to the remarks of Martyn Konig, the executive chairman and president of European Goldfields. "The funding facility from Qatar Holding represents not only a significant commitment to the company, but also to Greece," he says.

Mr Al Sayed agrees. "Hopefully this will have a positive impact on the local economy. [By] investing in the company we are giving them the security of financing to start operating," he says.

There is more to come. Post-conflict Libya is considered ripe for Qatari interest, in diplomatic as well as commercial terms.

Al Jazeera, owned by the Qatari state, will continue its transition from a broadcaster suspected of anti-western bias to one respected for the quality, scope and even objectivity of its output. The comfortable lifestyle that national wealth has brought the small indigenous population - only about a fifth of the 1.69 million total - has also reduced the risk of fallout from the Arab Spring. "Qatar is unique in that there are really very few local tensions and no major threat to stability," Jennifer Heeg, a human rights specialist based in Doha, told The Guardianthis year.

The QIA has been unofficially estimated to hold assets worth more than $60bn. Whatever the accurate figure, it seems likely to grow.

Mr Coates Ulrichsen has no doubt that Qatar will seek to extend its international reach.

"I am sure they will go on adding investments wherever and in whatever fields it fits their global strategy," he says. "There is also an awful lot of domestic investment, especially in terms of developing the infrastructure ahead of the World Cup. The position could change with other world developments in energy, or if one of the investments already made goes badly wrong, but I can only see the process continuing in the immediate future."

One aspect that seems unlikely to change soon is Qatari reluctance to speak publicly about the busy programme of acquisitions, with Qatar Holding's publicists stressing a long tradition of discretion.

It is perhaps the stuff of fantasy, but intriguing all the same, to imagine that by the time the host nation kicks off the 2022 Fifa World Cup, one David Beckham - by then 47, his playing career behind him - will have developed close ties to Doha and been groomed to serve as a figurehead for a small Gulf state on which billions of eyes will be focused.

twitter: Follow and share our breaking business news. Follow us