Two of the world’s wealthiest and most secretive sovereign wealth funds have partnered to establish a joint $2 billion fund to target overseas acquisitions, including assets in the UK.

Abu Dhabi’s state-owned International Petroleum Investment Company (IPIC) and the Qatar Investment Authority (QIA) indicated their new fund would seek global investments in the energy sector and beyond.

For Abu Dhabi, the largest oil producer of the seven city-states that make up the United Arab Emirates, the move signals its intent to continue its high-profile investment strategy, underscored by its recent purchase of a $7.5 billion stake in Citigroup.

For gas-rich Qatar, which holds stakes in J Sainsbury and the London Stock Exchange, the deal signals it too is poised to funnel further petrodollars into global acquisitions.

"We will look at any opportunities where we can make money and add value. That could be anywhere – the Middle East, Asia, Africa, Europe and the United States," said Khadem al-Qubaisi, the managing director of IPIC, an investment vehicle for the government of Abu Dhabi.

"We plan to invest in all sectors, including oil and petrochemicals."

However, the deal was also motivated by domestic needs. Qatar, which holds the world's third-largest gas reserves, is seeking to supply Abu Dhabi with the fuel it needs to meet its growing power demands.

The tie-up provides a framework for the neighbouring countries to extend their gas trade while leveraging each of their initial $1 billion investment for joint acquisitions.

"The teaming up of what are essentially two sovereign wealth funds reflects the warming political relations that we have witnessed between the United Arab Emirates and Qatar over the past several years and the alignment of their investment strategies," said Tristan Cooper, a senior analyst with Moody’s Middle East.

"The growing strategic links between the countries is also symbolised in the Dolphin project, the scheme through which the UAE has begun to import gas from Qatar by pipeline," Mr Cooper said.

Some analysts also viewed the partnership as a way of presenting a "united front" at a time when sovereign wealth funds find themselves under increased scrutiny as they snap up stakes in troubled Western firms.

Last week, Washington won a promise from Abu Dhabi, whose sovereign wealth fund controls assets of over $800 billion, to disavow "geopolitical goals" in their investments in the United States and elsewhere. The Qatar Investment Authority, with assets of $60 billion, has indicated it would be willing to sign on.

Abu Dhabi and Qatar have meanwhile sought to reassure observers their investments are driven only by economic considerations, not political ones, by hiring 10 public relations firms to increase the appearance of public transparency.

However, several calls to the QIA in Qatar went unanswered yesterday.

The IPIC declined to comment further on the exact nature of planned acquisitions.

"We will be conservative with the first investments and build carefully," Mr Al Qubaisi said in a statement.

"You cannot be aggressive from day one," he said.

Explore Industry Sectors

• Banking & Finance

• Construction & Property

• Consumer Goods

• Engineering

• Health

• Industrials

• Leisure

• Media

• Natural Resources

• Retailing

• Support Services

• Technology

• Telecoms

• Transport

• Utilities

Times Recommends

• B&B shareholders forced into funding rescue
• John Lewis department store sales plunge 8.3%
• Families turn to credit to cover mortgage bills