Shoppers can’t resist fancy brand names. The same is true for sovereign wealth funds. The acquisition of Harrods, the London department store, by a subsidiary of Qatar’s sovereign wealth fund is just the latest in a string of prestigious SWF-backed investments, which include carmakers Aston Martin and Volkswagen, and a host of investment banks. But everything that glitters is not gold – as many high-profile sports, media and tech deals will attest.

Globally, SWFs hold about $3,510bn of assets, according to Preqin, a research group. Probably the biggest belong to oil and gas-rich Abu Dhabi, Kuwait and Norway. But for organisations that control such large pots of cash, their investment strategies are not always logical. Most SWFs as good as admit they lack expertise in direct management; Abu Dhabi delegates four-fifths of its money to external managers, most of it into market-tracking index funds. This outsourced, passive approach makes sense for SWFs. But it is inconsistent with acquiring foreign trophy companies directly.

Still, it is right to diversify. The prime minister of Qatar wants its SWF to buy into sectors such as financial services, industrials and tourism. Fair enough. But Qatar, like other SWFs, has found it difficult to resist big-name investments such as a luxury Cuban hotel and London’s Canary Wharf office precinct.