Recent reports have revealed that the Qatar Investment Authority and Lufax, China's biggest online lender, are in advanced stages of talks about the possibility of investment. People who have insider knowledge of the deal have pointed out that the sovereign wealth fund is very keen to tap the world's second-largest economy in order to further boost its investment portfolio.
The Qatar Investment Authority has been discussing the possibility of an investment deal with Lufax for quite some time already. The wealth fund is planning to purchase a minority stake in Lufax which is an arm of the Chinese company Ping An Insurance Group Co. People with insider information about the ongoing negotiations revealed that Qatar Investment Authority could spend at least $500 million to seal the deal, and can spend up to $1 billion.
Despite the lack of a statement from both Lufax and Qatar Investment Authority, details of the ongoing negotiation have leaked to several media outlets. Some observers have said that the deal could be finalized and officially announced within the next few weeks. Prior to talks about the possible investment, Lufax completed a fundraising campaign in 2016 which raised the company's value to $18.5 billion.
Ping An, Lufax's parent company and China's largest insurer in terms of market value, has been aggressively pushing technological advancements in order to improve its insurance, banking, and asset management businesses more competitive in the ever-changing world of finance.
As part of Ping An's expansion to other industries, the company started to diversify its business to cover the sale of online banking platforms and facial recognition technologies which the company peddles to other financial firms in China and around the world as well. One of Ping An's top executives has stated that the company aims to generate at least half of its total earnings from its technology sector.
Despite the mostly positive tone of the current negotiations between the Qatar Investment Authority, some observers stated that it should be viewed with extreme carefulness. Some believe that there are still minor parts of the deal that the two companies have been unable to iron out, something that could lead the deal to at least delay if not fall apart.
The Qatar Investment Authority was created in 2006. The firm's primary role during its inception was to handle the country's windfall from its own liquefied natural gas sales. Since its establishment, the firm has put together a diverse set of investments which include supermarkets, department stores, energy companies, and real estate.
