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CEO profile: Shashank Srivastava, Qatar Financial Centre Authority
18 August 2011
Srivastava tells Global Investor/isf about his development strategy of diversification and attracting international investment
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Shashank Srivastava
Qatar Financial Centre Authority
What are the key points of differentiation for Qatar; why should asset managers consider setting up there?
Qatar has the only onshore financial centre in the region that features exceptionally strong underlying fundamentals with a solid, business-friendly financial infrastructure. Asset managers who set up here can do retail business in the country, they can market their own funds in the local currency and they can be located anywhere in Qatar. They can take advantage of the opportunities we provide for emerging market returns at developed market risks. There are very few countries in the world who can give you this.
Asset managers see major opportunities with sovereign wealth funds as well as high net worth individuals and families. But this mainly involves a flow of funds outside the region, managed outside the region. How significant are the domestic opportunities?
It’s important to look at the fundamentals. The economy is growing in double digits, with a good, solid footing. The Qatari economy is estimated to have grown by 16% in real terms in 2010 and is projected to grow by a further 20% in 2011 to reach a nominal GDP of $157.9bn, according to the IMF. We’re building a diversified economy in hydro-carbons and non-hydrocarbons. Qatar’s gas reserves, the third largest in the world, are estimated to be worth between $8.2trn and $14.2trn assuming a price between $55 and $95 a barrel of oil equivalent (BOE) respectively [According to the BP World Energy Outlook and QFC Authority analysis].
We’re also putting into place the services and infrastructure required to support this growth: education, healthcare, financial services and logistics. In addition to local wealth, there is a strong expat market from all over the world, who have different needs. Local asset management is a nascent industry, and there are many services that exist in other parts of the world that need to be developed and will be consumed here.
What importance do local investors place on their international asset managers having a local presence?
Srivastava: The institutions and family offices here have become very sophisticated and want on-the-ground coverage from the people who are investing their money. They want much closer interaction. People have had their fingers burnt investing in the West, and they want closer control and monitoring of their money. For the asset managers themselves a local presence gives them an advantage in terms of accessing the capital and servicing the client. Investors are demanding and expect much better service than they received in the past.
As a region, we are currently a net exporter of capital to West, to Europe and North America. But we all know that in the future capital is going to go where the growth is, where investment returns are more attractive, and our region will be one of those areas, together with South Asia, Central America and North Africa. To support changing demands and the shift in capital flows, it is better to be sitting here on the ground.