The Qatar Investment Authority, a sovereign wealth fund with over $500 billion in assets, has launched a $1 billion ‘fund of funds’ program to attract venture capital firms to the oil-rich state. The aim is to diversify investments, particularly in sectors like technology and healthcare. Recently, the fund welcomed its first group of venture capital managers, including B Capital, led by Facebook co-founder Eduardo Saverin, which is set to open its first Middle East office in Doha.
Attracting Global Venture Capital
This initiative has caught the attention of investors worldwide, with Raj Ganguly, co-CEO of B Capital, praising Qatar’s focus on artificial intelligence and its supportive environment for innovation. Ganguly emphasized the importance of backing founders from the Gulf Cooperation Council (GCC) region who possess a global perspective. B Capital, known for its investments in enterprise, fintech, healthcare, and climate technology, manages over $7 billion in assets and is committed to supporting technology startups at various stages of growth.
Mohsin Pirzada, head of funds at QIA, highlighted the dual investment mandate of the fund of funds program. Not only does it aim for strong commercial returns, but it also seeks to enhance the overall venture capital ecosystem in Qatar. By providing support to VCs looking to establish a stronger presence in the country, the program aims to stimulate the local economy, increase deal flow, and foster a thriving entrepreneurial ecosystem driven by a robust private sector.
Challenges and Opportunities in Doha
Doha’s efforts to attract financial services firms face stiff competition from other Middle Eastern countries offering attractive incentives. Riyadh, for instance, has implemented a program mandating companies seeking government contracts to relocate their regional headquarters to Saudi Arabia, enticing them with tax benefits. This strategy has successfully drawn major financial institutions like Morgan Stanley, Goldman Sachs, Lazard, and BlackRock to establish their presence in the Saudi capital.
Similarly, the UAE has been actively courting global firms, with prominent names such as Ray Dalio, Brevan Howard, PGIM, and General Atlantic setting up offices in Abu Dhabi. Despite this competitive landscape, Mohsin Pirzada emphasized the importance of collaboration among regional players, noting that success in attracting businesses and fostering innovation benefits the entire region.
As Qatar navigates the challenges of enticing financial services firms and positioning itself as a hub for venture capital investment, the $1 billion ‘fund of funds’ program represents a significant step towards achieving these goals. By leveraging its substantial assets and creating an attractive environment for VCs, Qatar is poised to drive innovation, support local entrepreneurship, and contribute to the growth of the broader Gulf business ecosystem.
