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Tue 29 Sep 2015 10:31 AM

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Qatar sovereign wealth fund could be hit by up to $12bn losses in Q3

Perfomance of Volkswagen, Glencore and Agricultural Bank of China stakes add up to poor quarter for the Qatar Investment Authority

Qatar sovereign wealth fund could be hit by up to $12bn losses in Q3

One of the world’s largest sovereign wealth funds, the Qatar Investment Authority (QIA), could be facing losses of as much as $12 billion in the last quarter alone, according to a newspaper report.

Estimated to be worth about $250 billion, the QIA has built up a string of stakes in some of the world’s largest corporates, including Royal Dutch Shell, Barclays and Volkswagen. It has also invested heavily into property, acquiring prime real estate in cities such as London and Paris.

However, the Financial Times reported on Tuesday that the QIA is expected to see losses at eight of its top 10 holdings during the third quarter, with two days of that period still remaining.

The newspaper said the biggest loss could come from the fund’s stake in Germany’s Volkswagen, which is facing the fallout from a damaging emissions scandal. The QIA, which is the third-biggest stakeholder in the world’s largest car manufacturer, is on track to see a paper loss of about $8.4 billion.

Elsewhere, the poor recent performance of Asian stock markets has seen a fall in the shares of Agricultural Bank of China. The Financial Times said the QIA’s losses from that stake could amount to $650 million.

The fund also has an 8.2 percent stake in commodities giant Glencore, which has seen about a third of its share value wiped out in recent weeks as a result of investor concern over its debt pile. The QIA could lose about $2.7 billion on that investment.

Shares in Glencore closed down 30 percent on Monday after investment bank Investec said that shareholders could be wiped out by the firm’s $27 billion debt.

Other potential losses stem from stakes in Royal Dutch Shell (about $500 million), Barclays ($240 million) and Siemens ($310 million).

On Monday, the QIA confirmed that it would be opening an office in New York, indicating in a press statement that it planned to invest $35 billion in the country over the next five years.

A QIA spokesperson has been contacted for comment.

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