Qatar fund buys $1.2 billion stake in Li's Hong Kong utility

[MELBOURNE] Qatar Investment Authority, the Gulf state's sovereign wealth fund, agreed to pay HK$9.3 billion (S$1.62 billion) to buy a stake in Hong Kong billionaire Li Ka-shing's electric utility as it boosts investments in Asia.

The fund's Qatar Holding LLC unit will acquire a total 19.9 per cent interest in HK Electric Investments & HK Electric Investments Ltd, controlled by Li's Power Assets Holdings Ltd, according to a statement from the Hong Kong-based company.

Qatar, which has invested in assets from German automaker Volkswagen AG to American Express Co's business-travel division, plans to put as much as US$20 billion into Asia in the next five years and expand offices in Beijing and New Delhi. It agreed in December to raise its stake in Hong Kong department store operator Lifestyle International Holdings Ltd.

The deal for HK Electric allows Power Assets to retain control of the utility, which supplies electricity to about 568,000 customers in the city, and allow it to pursue acquisitions.

Qatar acquired a 16.53 per cent stake from Power Assets, and a 3.37 per cent holding from Mr Li's Cheung Kong Infrastructure Holdings Ltd., Power Assets said.

Qatar said in November it plans to set up a US$10 billion investment venture with China's Citic Group as part of its plans to pour money into the region. The fund is an investor in Citic Capital Holdings Ltd, an alternative investment company backed by the state-owned Citic Group and China's sovereign-wealth fund and focused on private equity in Japan, China and the US and real estate in China.

Power Assets raised HK$24.1 billion in the initial public offering of HK Electric last year. Mr Li has a net worth of $35.8 billion, according to the Bloomberg Billionaires Index, and is Hong Kong's richest man.

Qatar, the richest country in the world on a per-capita basis, has deployed surplus income from liquefied natural gas exports into real estate, banks, and automakers. Qatar Holding, the foreign investment arm of the fund, has invested in luxury hotels in Cannes and Amsterdam as well buying stakes in Barclays Plc and Credit Suisse Group AG.

BLOOMBERG