$1.1bn haul as Kuwait dumps Citi
Kuwait’s sovereign wealth fund made a $1.1bn (£669.5m) profit when it sold its stake in Citigroup yesterday, becoming the latest Gulf investor to offload foreign investments as markets improve.
The Kuwait Investment Authority transferred the preferred shares it owned in Citigroup into common stock and sold the entire holding for $4.1bn. It had invested $3bn in the American investment bank in January 2008, when it also pumped $2bn into Merrill Lynch (which has since been bought by Bank of America).
The move comes after Kuwait’s sovereign wealth fund, which manages state assets, drew sharp criticism from some parliamentarians for its investments in the US banks.
During the financial crisis sovereign wealth funds from China and the Middle East stepped in to shore up the capital position of many cash-strapped US and UK banks, but are now trying to extricate themselves from their investments. Barclays avoided a government bailout partly by selling larges stakes to the Qatar and Abu Dhabi sovereign wealth funds. The Abu Dhabi investors made a £1.46bn profit when they sold most of their £2bn stake in June.
Saudi Arabia’s Prince Alwaleed bin Talal remains a shareholder in Citigroup, despite an 88 per cent drop in the bank’s share price during the past two years.