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.
Qatar Investment Authority (QIA) lost $ 27bn and ended at $ 66bn in 2008, while Saudi assets, run by the Saudi Arabian Monetary Agency (SAMA), valued at $ 501bn at end-2008, shed around $ 46bn, the report said.
The World Investment Report 2009, released last week, said that assets held by the four Gulf funds dropped to $ 1.115trillion last year from $ 1.165trillion at the end of 2007 and that government injections of $ 300bn helped narrow their losses.
Abu Dhabi Investment Authority (ADIA) was the most affected, as it shed around $ 183bn from the $ 453bn it held in 2007. But the government pumped $ 57bn into the fund, helping it end last year at $ 329bn.
Kuwait Investment Authority (KIA), which owns stakes in Daimler and Citigroup, lost $ 94bn from $ 262bn it held at the end of 2007. The Kuwaiti government, however, injected $ 59bn, helping the fund to stand at $ 228bn at the end of last year.
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.