QFCA 01 cover: 00-cover.fc41 17/6/11 13:58 Page 1 Qatar guide to asset management in association with funds global REGULATION, OPERATIONS, PLANNING & STRATEGY ad_template:Layout 1 12/6/09 15:27 Page 1 WEALTH YESTERDAY TODAY TOMORROW From priceless art to the diversity of an investment portfolio, Asset Management is thriving in Qatar. With its world class regulation and secure and transparent rule of law, the QFC is leading Qatar into a dynamic and diversified future. Benefit today from the lowest tax in the world,* 100% ownership, repatriation of all profits, and an onshore trading environment. And tomorrow, why not experience one of Qatar’s oldest treasures3 www.qfc.com.qa BUSINESS ENERGY QFCA 03 Contents:Layout 1 17/6/11 15:31 Page 3 contents 06 Qatar in 2011 A look back at the state of Qatar’s economy 08 QFC Authority Q&A Yousuf Al-Jaida outlines his outlook 10 Asset management focus Helping the industry meet global standards 14 Executive interview Emad Mansour of QFIB discusses his plans 18 Executive interview Axa IM Qatar and its first mover advantage 22 Application process How firms get listed by the QFC Authority 24 Regulation Exploring new guidelines on risk and stability Published by 27 Taxation funds europe limited ©2011 288 Bishopsgate What new tax rules mean for global players London EC2M 4QP Tel: +44 (0)203 178 5872 Fax: +44 (0)203 178 4002 28 Insurance Building an online marketplace for insurance Printed in Great Britain by Buxton Press The views expressed in this publication do not necessarily coincide with the views of the publishers. 30 Qatar Exchange Although the publishers have made every effort to ensure the accuracy of the information contained in The challenge of increasing liquidity this publication, neither Funds Europe Limited nor any contributing author can accept any legal responsibility whatsoever for any consequences that may arise from errors or omissions contained in the 34 Listings publication or from acting on any advice given. In particular, this publication is not a substitute for Licensed firms in Qatar professional advice on a specific transaction. QFCA 05 Intro - jss aspnf:Layout 1 17/6/11 14:04 Page 4 QFCA 05 Intro - jss aspnf:Layout 1 17/6/11 14:04 Page 5 INTRODUCTION A new hub for asset management Shashank Srivastava, acting chief executive, QFC Authority I am delighted to be introducing Funds Global ’s increasing breadth and depth of investible new Guide to Asset Management in Qatar assets and robust regulatory regime coupled which serves to highlight the country’s growing with its strategic location, increasingly make it role in the region’s dynamic asset management one of the most attractive fund management industry. The guide brings together a wealth of markets in the region, offering emerging market information on Qatar in terms of economic returns at risk levels associated with developed fundamentals, future investment and the factors economies. driving growth in the asset management I am sure that for asset management firms industry today, as well as offering insightful looking to establish themselves in Qatar, Funds interviews with leading executives from various Global ’s Guide to Asset Management in Qatar organisations, such as the Qatar Exchange, will be an indispensible resource. State Street, AXA and QInvest. This new guide examines how Qatar can offer asset management firms looking to locate to the region distinct advantages over other financial centres and, indeed, looks at the role of the ‘The guide brings QFC Authority in developing Qatar as a pre- eminent hub for asset management. Together together a wealth of with an overview of Qatar’s world-class information on Qatar regulatory regime, the guide also offers a step- by-step approach to setting up an asset in terms of economic management business in the emirate. fundamentals, future There were US$85.8bn (€59.4bn) of assets under management in the Gulf Co-operation investment and the Council region last year (National Bank of Abu factors driving growth Dhabi’s GCC Mutual Fund Index) and while Qatar represents a small proportion of the in the asset management GCC funds industry, this is rapidly changing. industry today’ Qatar’s exceptional economic growth, built on its rich long-term hydrocarbon resources, high levels of institutional and retail wealth, the 5 06-07 Qatar in 2010:Layout 1 17/6/11 15:46 Page 6 QATAR IN 2011 Onwards and upwards Funds Global examines the economic, social and cultural developments within Qatar and how they are helping to promote the country’s asset management market The strong economic foundation of Qatar is undeniable. In 2010 Qatar was identified as the world’s fastest growing economy, expanding at a rate of 19.4%, and also had one of the highest GDP per capita at just under $80,000. Much of this growth is due to the strength of its hydrocarbon industry. Qatar has the world’s largest per capita production and proven reserves of both oil and natural gas. The high levels of production and export of liquefied natural gas, oil, petrochemicals and other related industries are a huge contribution to the Qatari economy and also a significant target of international investment. More than $100 billion has been invested in the Qatar’s energy sector from abroad while Qatar plans to invest more than $120 billion in its energy sector over the next ten years. Yet the energy sector is not the sole focus of Qatar’s economic development plans. Figures produced by the International Monetary Funds (IMF) show strong growth in a number of non- hydrocarbon-based sectors, such as transport and communications, trade and tourism, and the finance, insurance and real estate industries. Of course the finance industry in Qatar suffered some negative implications from the financial crisis just like any other region did, however it has staged a rapid recovery, posting double figure percentage growth in both 2009 and 2010, something that was noted in a recent IMF Country Report. Speedy recovery “Qatar has weathered the global financial crisis exceptionally well, reflecting the swift and 06-07 Qatar in 2010:Layout 1 17/6/11 15:46 Page 7 strong policy response by the authorities,” sophisticated infrastructure at the Qatar stated the report. “The sizeable enhancement Exchange and the work being done at the of liquefied natural gas capacity; large ‘The finance industry Qatar Financial Centre Authority to promote government support to the banking system and in Qatar suffered the asset management sector to an international increase in public spending helped sustain high audience will result in an MSCI upgrade growth rates through the global crisis.” some negative sooner rather than later. While noting that the country’s banking implications from the system “remains sound”, the IMF report Sporting ambitions recommends that Qatar’s economic policy financial crisis just Another likely source of investment and should focus on “strengthening the efficiency of like any other region’ economic growth for Qatar will be the Fifa the domestic financial system and regulatory World Cup in 2022, something also noted by arrangements”. It notes that “the Qatar the IMF in its country review. A substantial sum Central Bank (QCB) will have to rely of resources had been earmarked for the major increasingly on macroprudential instruments to infrastructure upgrades that would be needed manage the credit cycle and to counter should the World cup come to Qatar, such as potential surges in capital inflows”. the integrated metro/rail systems, roads and The report recommends the work being done airport. Ever since the vote was made in at a regulatory level, noting that the QCB is December 2010, this infrastructure investment closely monitoring potential risks to the banking has begun to flow in. system. “The QCB published its first Financial With just over ten years to go before the Fifa Stability Review and intends making this an jamboree comes to Qatar, there is plenty of ongoing process. The authorities’ commitment time for the infrastructure upgrades and various to establish a single financial regulatory authority construction to be completed – as one asset under the umbrella of the central bank remains manager in Qatar suggested, there is five years undiminished. They continue to align their to complete the projects and five years to show supervisory and regulatory frameworks with best them off. standards and practices, and plan to implement Football is not the only international sport Basel III proposals early.” with a growing profile in Qatar. In addition to The surge in capital inflow that the IMF refers hosting the 2006 Asian Games, Qatar has more to may well come from a change in status from recently staged the IAAF World Indoor the influential index compiler MSCI index, Athletics Championships (March 2010). The which could have a very positive impact on the two Qatar Tennis Opens for men and women country’s asset management industry. The are regular stops on the professional tennis tour change would see Qatar upgraded from a circuit and the Qatar Masters golf tournament ‘frontier’ market to an ‘emerging’ market thus has featured on the PGA European Tour making it an eligible destination for investment schedule since 1998. for many institutional investors whose Qatar has also made a significant investment investment decisions are governed by strict in expanding its cultural facilities. The exposure criteria. New foreign investment could government-sponsored Qatar Foundation is consequently increase by anywhere between chaired by HH Sheikh Mozah Bint Nasser Al $2-4 billion. Missned and was established to promote MSCI is due to make its latest announcement cultural richness and preserve the country’s in June and the upgrade is not a certainty.