AS a symbol of the financial firepower now coming out of the Gulf states, it could scarcely be bettered. When it emerged last month that a London penthouse apartment had been sold for £100m – making it the most expensive flat in London – the buyer was named as Sheikh Hamad bin Jassim bin Jabr al-Thani, the foreign minister of Qatar.

This apartment, with views across Hyde Park, is the largest in a complex expected to be completed two years from now. It will, no doubt, make a magnificent London base for Sheikh Hamad. And, all being well, it will make a nice investment; he is a key financial backer of the building project, which is being led by developer Christian Candy.

Qatar is tiny, little more than twice the size of Northumberland. Its population is fewer than a million.

But, together with a clutch of small neighbouring Gulf states, Qatar is emerging as a hugely muscular investment force on the world stage. The doubling of oil prices in the past five years – bringing with it a concomitant increase in gas prices – means that hundreds of billions of dollars of Middle Eastern money is looking for a home.

Qatar alone is reckoned to have built up a current-account surplus of about $40 billion (£20 billion) since the beginning of the decade.

With money like that washing around, last week’s purchase of a 14% stake in J Sainsbury by the Qatari-backed Delta fund looks comfortably affordable. Topping up previous purchases, the latest buying spree brings the Qatari holding in Sainsbury to 17%, now worth nearly £1.7 billion.

The Qatar Investment Authority (QIA) controls Delta. Sheikh Hamad also has a personal stake.

Since its inception, Delta has made some big and bold moves. It paid £1.4 billion for the nursing-home operator Four Seasons and £150m for the schools operator Senad. Last year the QIA tried unsuccessfully to buy Thames Water for £8 billion: the business eventually went to Macquarie of Australia. QIA is one of the groups vying to buy the freehold of HSBC’s £1 billion head office in London’s Canary Wharf.

A separate Qatari company is in the consortium that has bought Chelsea Barracks for £800m – a figure that could rise by a further £100m if all the hopes of the developers are realised.

The money being wielded by Qatari investors looks impressive. But it is small compared with the sums controlled by some of its neighbours. The Abu Dhabi Investment Authority is believed to have assets of more than £250 billion. The Kuwait Investment Authority is thought to control more than £125 billion.

Britain has already felt the impact of Middle Eastern investment funds looking for a home. Dubai Ports World bought P&O for £3.9 billion. Dubai International Capital paid £675m last summer for the Travelodge hotels chain. Bahrain-controlled Arcapita agreed to pay £1.6 billion for Northern Ireland’s electricity supplier Viridian. And Mubadala, the private-equity investment arm of the Abu Dhabi government, was part of the Goldman Sachs consortium that tried unsuccessfully to buy the airport operator BAA.

Two years ago Dubai International Capital bought the Tussauds Group – which embraces Legoland, Alton Towers, Thorpe Park and Chessington World of Adventures as well as the London waxworks museum – for £800m. It has just sold an 80% stake for £1 billion.

The engineering group Doncasters is also now in Dubai hands. Liverpool football club came close to being taken over by Dubai. Last year Istithmar, a state- controlled Dubai business, bought a 2.7% stake in Standard Chartered. Only this month Saudi businessman Maan Abdulwahed al-Sanea bought 3% of HSBC. That holding is worth £3.2 billion.

Dubai is an exception within the Gulf region: its oil production is small and dwindling, accounting for less than 6% of gross domestic product.

But its neighbours have gained hugely from the rise in oil and gas prices since the turn of the decade. Citigroup has calculated that Middle Eastern states as a whole generated a combined current-account surplus of about £100 billion a year between 2002 and 2005. Last year the surplus – in effect money that will be looking for an investment home – was probably between £100 billion and £150 billion.

Kuwait was a pioneer. Its Kuwait Investment Fund was already a major force by the late 1980s, and tried to buy 20% of BP when the privatisation of the company flopped.

But its neighbours are now striving to catch up, realising that, one day, the oil will run out.

Already some of the world’s best-known companies – Daimler Chrysler, Ferrari and Citigroup – have Gulf investors among their biggest shareholders.

The list of companies with big Middle Eastern funds on their share registers will lengthen. The sheer volume of money flowing into the Gulf as oil revenues and flowing out again as investment funds is colossal.

Some will be spent on £100m apartments. Much more will be spent on buying up businesses.

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