Jul 29, 2022
Prem Watsa's Fairfax couldn’t dodge Q2 market turmoil
By Noah Zivitz
Fairfax swings to Q2 loss on portfolio weakness
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Prem Watsa’s Fairfax Financial Holdings Ltd. swung to a net loss of US$881.4 million in the second quarter as the conglomerate booked a US$1.5-billion net loss on its investments that masked underlying strength in its sprawling insurance operations.
That was the result of US$269 million in realized investing gains being overwhelmed by US$1.8 billion in unrealized losses. And of that, US$1 billion stemmed from paper losses on Fairfax’s equity exposure.
“Net losses on investments of US$1,547.9 million during the quarter were principally comprised of mark-to-market losses on common stocks of US$873.8 million reflecting the 16 per cent drop in the S&P 500 in the quarter and mark-to-market losses on bonds of US$413.4 million due to continued rising interest rates,” said Watsa, the founder, chairman, and chief executive of Fairfax, in a release.