Gulf sovereign funds lost $350b in global crisis, says UN
Sovereign wealth funds (SWFs) of four oil-exporting Gulf states lost around 350 billion dollars last year due to the global financial crisis, according to a UN report.
However, the funds -- those of Saudi Arabia, Kuwait, Qatar and Abu Dhabi -- almost maintained their total asset value at the end of 2008 after governments injected into them huge returns from oil income, the United Nations Conference on Trade and Development (UNCTAD) said in a report.
The World Investment Report 2009, released last week, said that assets held by the four Gulf funds dropped to 1.115 trillion dollars last year from 1.165 trillion dollars at the end of 2007 and that government injections of 300 billion dollars helped narrow their losses.
Abu Dhabi Investment Authority (ADIA) was the most affected, as it shed around 183 billion dollars from the 453 billion dollars it held in 2007. But the government pumped 57 billion dollars into the fund, helping it end last year at 329 billion dollars.
Kuwait Investment Authority (KIA), which owns stakes in Daimler and Citigroup, lost 94 billion dollars from 262 billion dollars it held at the end of 2007. The Kuwaiti government, however, injected 59 billion dollars, helping the fund to stand at 228 billion dollars at the end of last year.
Qatar Investment Authority (QIA) lost 27 billion dollars and ended at 66 billion dollars in 2008, while Saudi assets, run by the Saudi Arabian Monetary Agency (SAMA), valued at 501 billion dollars at end-2008, shed around 46 billion dollars, the report said.
Gulf SWFs have never disclosed the size of their assets nor losses.
The UNCTAD report said that in recent years Gulf SWFs have become more proactive investors, entering riskier investments and targeting strategic holdings in international companies.
"The recent collapse of real estate and equity markets has generated large losses for SWFs, but it also offers investment opportunities," UNCTAD said.
As a result, some Gulf SWFs have become more cautious in investing abroad and turned to investments in domestic economies.
The four Gulf states pump more than 13 million barrels of oil per day, just under half of total Opec production of around 29 million bpd.
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