SWF Radar Citigroup

The National reports that, “The Abu Dhabi Investment Authority (Adia) is backing Citigroup to ride out the subprime storm, despite its 44 per cent loss since taking a US$7.5 billion (Dh27.5bn) stake in the world’s largest bank in November, an Abu Dhabi investment fund manager said yesterday.”

KUNA reports that, “Kuwait Investment Authority (KIA) is a long-term investor and did not suffer losses worth USD 1.5 billion for its investments in Merrill Lynch and CitiGroup, as was recently claimed, said Managing Director Bader Al-Saad on Sunday.”

Felix Salmon suggests that, rather than being too big to fail, Citi may be too big to rescue.

ADIA, GIC and KIA are the big sovereigns that have invested in Citigroup since November 2007, with the New Jersey Division of Investment also acquiring a stake.

Dow Jones reports that, “William Clark, director of the New Jersey division of investment, said that while the pension system is looking at making more financial services investments, it is being very cautious.”

The article quotes Clark as saying at the Private Equity Analyst Limited Partners Summit in New York that, “There’s a limited number of falling knives that we can catch.”

The New Jersey Division of Investment, a pension fund, took stakes in Citigroup and Merrill Lynch earlier this year alongside several SWFs. It was then reported as having entered into talks with a foreign government fund with a view to teaming up on other deals.

The Associated Press reports that the Kuwait Investment Authority’s [KIA] January investments in Citigroup and Merrill Lynch were $3bn and $2bn respectively.

Thomson Reuters reports that, “State-owned Kuwait Investment Authority (KIA) is looking at more investments in the financial sector and might consider raising its stakes in U.S. banks Citigroup and Merrill Lynch, its managing director said on Wednesday.”

CNBC reports that, “Sovereign wealth funds are not likely to try to take more control over Citigroup in exchange for their investment, but they have the right to meet with the bank’s executives and be informed of its progress, Chairman Sir Win Bischoff told CNBC Europe.”

The article quotes Bischoff as saying that, “They do not wish to have people on the board, because having people on the board constrains what you can do. … I’d be very surprised if they asked for more, because politically they are very astute.”

TheStreet.com reports that, “Citigroup on Thursday said it was moving its co-head of investment banking to Dubai, reflecting a greater emphasis on the Middle East. Alberto Verme will continue to head the bank’s investment banking unit with Ray McGuire, who remains based in New York. The emphasis on the Middle East comes on the heels of substantial investments in the reeling bank from the region, including capital infusions from the Abu Dhabi Investment Authority, the Kuwait Investment Authority and Saudi Arabia’s Prince Alwaleed bin Talal since November.”

Bloomberg reports that, “Kuwait’s $250 billion sovereign wealth fund may boost its stakes in Citigroup Inc. and Merrill Lynch & Co. as it pursues investments in U.S. and European companies battered by subprime-mortgage related losses.”

The Wall Street Journal reports that, “The Government of Singapore Investment Corp. will likely participate in Citigroup Inc.’s coming sale of $3 billion in common stock, two people familiar with the situation said Wednesday. … GIC in January paid $6.9 billion for preferred stock that can be converted to common stock accounting for around 4% of Citigroup’s equity. That stake would be diluted unless GIC buys a sufficient portion of common stock in the new offering.”