Saturday, January 23, 2010

KIA and Citigroup

The winners fall into two camps. Some waited until prices had fallen further before buying. Qatar’s investment fund and prominent individuals in Qatar and Abu Dhabi participated in Barclays’ capital raisings in June and October last year and have made money. Others negotiated well. Kuwait and GIC invested in Citigroup in January 2008 but the fine print protected them from share-price falls. The Abu Dhabi Investment Authority, by contrast, invested $7.5 billion in Citi in November 2007 in less secure convertible instruments. It is likely to end up nursing a large loss.

Banks and sovereign-wealth funds: Falling knives | The Economist

The Kuwait Investment Authority (KIA) along with Singapore's GIC made handsome profits from their investment in Citigroup, while others suffered a loss such as Abu Dhabi Investment Authority (ADIA). Commendable investment strategy by KIA with an eye on the details that proved crucial given the circumstances. Good to see the oldest and most experienced of the sovereign wealth funds rise up to the occasion.    

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