UPDATE 1 — Qatar launches wealth fund division for domestic investments

Division will initially oversee 45 state-owned enterprises That represents roughly one-third of QIA's assets Mandate includes supporting privatisation, widening private-sector participation Launch comes as Strait of Hormuz disruption squeezes Qatar's LNG revenue (Adds details and quotes throughout) By Andrew Mills NEW YORK, Sept 20 (Reuters) — Qatar's prime minister announced on Sunday the creation of a new division of the Qatar Investment Authority dedicated to developing domestic investments, marking a new direction for a sovereign wealth fund long focused on building wealth overseas.

The Gulf Arab state is facing financial strain due to the US-Israeli war on Iran and the effective closure of the Strait of Hormuz, which has made it impossible for it to reliably export liquefied natural gas — still Qatar's primary income source despite efforts to diversify the economy. "We aim to expand the role of the private sector in driving Qatar's economic growth," Sheikh Mohammed bin Abdulrahman Al Thani said as he announced the new division, Doha Investment, at a special edition of the Qatar Economic Forum in New York. The annual gathering was cancelled in May, following weeks of Iranian missile and drone attacks on Gulf states, including Qatar.

"It will support our strongest companies, help emerging businesses grow, deepen capital markets and attract international capital and expertise to contribute to this effort," he added. Dedicated Manager The new division will operate as the dedicated manager of QIA's local portfolio, initially overseeing 45 state-owned enterprises that represent roughly one-third of the wealth fund's total assets, according to Sheikh Faisal bin Thani Al Thani, Qatar's minister of commerce and industry. He will serve as managing director and vice-chairman of Doha Investment.

Sheikh Faisal described the division not as a new creation but a consolidation, adding that the step has been under consideration for more than a decade. The QIA, which does not release comprehensive data on its holdings but is estimated by the research firm Global SWF to have assets under management of $580 billion, was established in 2005 with an original charter centred on deploying capital abroad. It has built up a domestic footprint in recent years, scaling up companies that have become national leaders, including Qatar Airways, lender QNB and telecoms company Ooredoo, developer Qatari Diar and hotels owner Katara Hospitality.

The new division's mandate also spans strengthening and building new national champions, supporting privatisation, widening private-sector participation and diversifying Qatar's economy, Sheikh Faisal said. 5% of real GDP in the third quarter of this year, according to the Qatar Central Bank and National Planning Council. com;)