The Qatar Investment Authority, the sovereign wealth fund of the State of Qatar, has taken a £200 million stake in Severn Trent, increasing its holdings in one of the UK's biggest water companies from 3.35% to 4.18%.

The majority of the fund's investments are outside Qatar. Since 2005 the QIA has built a major global portfolio that now spans a broad range of asset classes and regions and invested billions of pounds into UK infrastructure in recent years.

Last month Severn Trent, a FTSE 100 group with a market capitalisation of £4.57bn, posted a 6.8% rise in annual profit - pre-tax profit for the year to the end of March rose £36m to £563.3m.

The investment in the utility comes at an interesting time, given the current ongoing debate about renationalisation of UK infrastructure assets currently in private ownership and the announcement of Labour's plans to renationalise UK water companies.

Commenting on the announcement, leading investment magazine Investor’s Chronicle has tipped Severn Trent shares as a good buy, saying:

“Having been awarded fast-track status by Ofwat for AMP7, the group is capitalising on this forward visibility, ramping up investment for a fast start to the next regulatory period. We see further upside ahead. Buy.”