Sovereign Wealth Funds (SWFs), in former times of prosperity the darlings of Wall Street, have been less of a force in the investment world as most of the funds have sustained heavy losses in the global recession. A drop in oil prices, along with the usual pains of the housing and banking sectors, have effectively sent SWFs into hiding, according to the Journal, as the once-strong investment sector moves to cut its losses.
One figure touted by the Council on Foreign Relations is a $100 billion collective loss among the foreign assets of the funds that make up the Gulf Cooperation Council states: Bahrain, Qatar, Kuwait, Oman, Saudi Arabia, and the United Arab Emirates. This does not include the personal monetary losses sustained among the wealthy ruling families of these Mideast states.
One fund head, Sameer Al Ansari of Dubai International Capital, claims to have lost $3 billion from his fund’s $10 billion portfolio, which includes stakes in London bank HSBC Holdings.
“Our primary focus in [the United States and Europe] is to protect existing assets rather than acquire new ones,” said Al Ansari. “It’s about return of equity rather than return on equity.”