Dubai: Qatar's sovereign wealth fund has increased its stake in Xstrata to just over 5 per cent, potentially making it easier for commodities trader Glencore to buy the Anglo-Swiss miner.

Qatar, a keen commodities investor, is now Xstrata's third-largest shareholder behind Glencore and asset manager BlackRock Incorporated, giving it exposure to a metals powerhouse after missing out on other recent deals.

Qatar has also bought stakes in luxury goods house LVMH and oil company Total, in a recent spending spree using its natural gas wealth. It also owns shares in Credit Suisse and the upmarket Harrods department store.

Several major shareholders have opposed Glencore's $41 billion (Dh150.5 billion) bid for Xstrata but bankers said Qatar would be a passive investor, unlikely to stand in the way. The deal must be backed by 75 per cent of shareholders excluding Glencore.

"Getting the Qataris on board will be good for Glencore. They are not activist investors and won't be looking at gaining management influence. But they are opportunistic and won't commit a pound unless they are seeing clear benefits," said a Dubai-based banker.

Regulatory filings showed that the Qatar Investment Authority (QIA) built up its Xstrata holding, worth $2.65 billion at current prices, through stock market transactions from around 3 per cent when Glencore announced its bid. No immediate comment was available from the Qatar fund.

Glencore plans to buy Xstrata in an all-share transaction that could create a combined group worth more than £50 billion (Dh291.4 billion), shaking up the industry with its biggest deal to date.

Key Xstrata shareholders including Standard Life Investments and Schroders are seeking better terms from Glencore.

Glencore, the world's largest diversified commodities trader, already owns 34 per cent of Xstrata. A tie-up between the two has long been expected as Glencore wants to add more mines to its trading clout.

Under the terms of the transaction, Xstrata shareholders other than Glencore would hold 45 per cent of the new company, to be named Glencore Xstrata International, even though Xstrata assets would comprise about 65 per cent of the combined group's asset value. Bankers said Qatar is likely to keep building its stake.

"The cash stake is about 4.75 per cent and it is the derivatives position which has seen the stake go up by 5 per cent. It's not normal of Qatar to go above the 5-per cent threshold...they could end up owning more," said the banker.

Another banker said that Qatar, among the richest countries in the world per capita, would likely buy more.

"These companies are on top of QIA's shopping list and the sector is very strategic... we wouldn't be surprised if this happens gradually in the coming few months," he said.

Glencore is the top Xstrata shareholder with a 33.65-per cent stake, followed by BlackRock which has a 5.43 per cent ownership in the miner.

Qatar Holding, the sovereign wealth fund's investment arm, missed out on a $1 billion investment in European Goldfields last year after the company instead agreed on a $2.4 billion takeover by Canadian group Eldorado Gold.

Qatar surprised many observers by passing on the Glencore initial public offering last year as rival Abu Dhabi fund Aabar bought into the flotation. Glencore shares have fallen 22 per cent since their listing in May last year, and Xstrata shares have lost 20 per cent over the same period, so Qatar's current purchase will give it a sizeable stake in the merged entity at a significant discount.

"This is typical Qatar. They prefer to be the largest minority investors and are not keen on management control. Obviously, they are seeing value in this. Qataris like commodities generally and Glencore shares have fallen off the cliff post its IPO," said the first banker.