The large-scale outbreak of the coronavirus infection has had a negative impact on stock markets for a long time. After a series of shocks, they seem to be recovering. However, most sovereign funds are suffering from tremendous financial losses, which amount to billions.

Since the beginning of this year, the largest sovereign funds have lost about $67 billion due to the COVID-19 pandemic. The bulk of these investments, about $40 billion, belonged to China Investment Corporation. This leading Chinese conglomerate consists of such companies as China Construction Bank, Industrial and Commercial Bank of China, Bank of China, as well as Agricultural Bank of China.

According to Javier Capape, an expert at the IE Center for the Governance of Change, a large number of major firms, including Barclays and Credit Suisse, took a hit. The companies that had purchased stakes in these banks were also damaged. For example, Qatar Investment Authority (QIA) bought into Credit Suisse in 2008 and now owns a 5.21% share in the company. The fund faced a sharp decline in stock prices by 39-49%. The Singapore-based investment company Temasek Holdings holding a 16% share of Standard Chartered Bank met a similar fate.

The Institute of International Finance suggests that by the end of 2020 the assets managed by the Persian Gulf sovereign wealth funds may drop in price by $296 billion. The lion's share of the losses is expected to stem from stock market expenses, while the rest will come from drawdowns taken by cash-squeezed governments.

Nevertheless, the costs related to warehousing and logistics, as well as the delivery of food and some non-food goods may pay off, Javier Capape noted. The expert emphasized that some firms transporting groceries or other goods were controlled by sovereign funds such as Uber, Grab, or Didi Chuxing.

Despite the current fragile environment, some funds are still on the lookout for deals. For example, Saudi Arabia's Public Investment Fund (PIF) has purchased stakes in four European oil corporations: British-Dutch company Royal Dutch Shell, French oil giant Total, Norway's Equinor, and Italy's Eni. Previously, PIF owned a 4.27% stake in Uber and an 8.2% share in Carnival Corporation, the world's largest cruise operator.