Qatar's QIA to diversify as $6bn losses emerge
Qatar Investment Authority, which holds shares in auto manufacturer Volkswagen and mining firm Glencore, has reportedly lost $5.8bn due to a dip in the market price of both
Qatar Investment Authority (QIA) is eyeing diversification as it grapples to deal with the impact of sliding prices of the shares it holds, and global oil price fluctuation.
German carmaker Volkswagen has been pummelled over an emission testing scandal, while mining firm Glencore has came under pressure over its debt load, together wiping $5.8bn off the Qatar fund's holdings since 18 September, 2015, according to Thomson Reuters data.
QIA, which has $334bn of assets according to industry tracker the Sovereign Wealth Center, has been reviewing its investment strategy as a result of oil's downward move and following the appointment of a new chief executive in December 2014.
According to Reuters, cash available to fund diversification is not as bountiful as when oil was above $100 a barrel, meaning all Gulf sovereign funds will have to focus more on investing returns from existing assets as opposed to just finding avenues for new money.
One senior banker who regularly pitches investments to the QIA said it was in a healthier state than other funds, because Qatar's wealth was generated from gas which has not seen such big price swings as oil.
But the banker said he had noted a reduced appetite for big ticket investments.
"When you go and pitch them something that will need a couple of billion dollars, they don't seem to have that kind of liquidity," he said, speaking on condition of anonymity due to the sensitivity of the subject, according to Arabian Business.