|
|||||||||||||||||
TOP STORIESAre sovereign wealth funds stupid?18 June 2008COMMENTSYes they've lost money, but do they care? No. The amount they've lost is peanuts to them. At the same time they've helped sure up Western institutions who would surely have collapsed without their assistance. We should be thanking rather than insulting them. Read all comments »They’ve lost tens of billions of pounds pouring money into the likes of UBS, Citigroup and Merrill Lynch, and they’re still back for more.
Barclays is said to be close to raising £4bn from unknown sovereign sources, thought to include the likes of Singapore’s Temasek and China Development Bank.
But China Development Bank has already lost money on the 3% stake it took in Barclays last year. And Temasek is nursing a hefty loss on Merrill shares, which have fallen around 25% since it purchased them last December.
It’s clear why banks are courting sovereign investors – existing shareholders have got cold feet when it comes to rights issues, and bringing in an investor from Asia can be dressed up as a strategically advantageous move.
But why would a sovereign fund want to pour its money down the drain? Some say sovereign funds lack the talent to identify better investment opportunities. Is this the case, or do they know something we don’t?
COMMENTSAlex Lim, Asset Management, Wed 18 Jun 08Just an opinion, one of the many reasons may be that the SWFs from Asia and the Middle East possess the highest amount of foreign reserves in the world. they cannot pump everything into infrastructure or their internal economy. so external is the natural way to go.
Sid, Research, Wed 18 Jun 08Sovereign wealth funds are the aged relatives of the investment space: rich, slow, and more than a litte dissassociated from reality. If they paid reasonable money they might be able to hire a few people to point out that the Western financial system is in the throes fo a crisis that's far from over and investing again at this stage is tantamount to throwing all their cash in a hole. Add your comment »Karen Dahl, Wed 18 Jun 08Sovereign Wealth Fund administrators are aware of the demise of the western economy and financial administrative systems. High wages for number crunchers do not real money generate and the days of relying on spurious non-creative money moving strategies by overpaid clerical bankers are numbered.
Gao, Sales & Marketing, Fri 20 Jun 08Dismissing sovereign funds as stupid shows a lack of appreciation of their importance to the world financial system. Yes they've lost some money, but do they care? No. The amount they've lost is peanuts to them. At the same time they've helped Western institutions who would surely have collapsed without their assistance. We should be thanking rather than insulting them. Add your comment »Mr, Sales & Marketing, Sun 22 Jun 08Morgan Stanley estimates that sovereign wealth funds have invested $113bn in financials so far. But their total funds are thought to total $3.3 trillion to invest. Goes to show that this is just a drop in the ocean to them. Add your comment »JJ, Hedge Funds, Sun 22 Jun 08These funds see banks as a long term investment. Citigroup's shares are lower than they've been for ten years. They may look stupid now, but this won't be the case once financials come out of their current slump. Add your comment »Mark, Debt / Fixed Income, Tue 24 Jun 08It is just a case of finding somewhere to put it all. Also they can take a very long-term view. Something that has always paid off under any circumstances if you are reasonably diversified. Add your comment »ex SWF, Investment Banking / M & A, Tue 24 Jun 08They have a long term view and if you have an investment period of 10 years, you are bound to be ahead - even if you did buy Citi stock. Having said that they are not the fastest around the block either.. Add your comment »fatexpatinthesun, Asset Management, Thu 26 Jun 08having worked closely with a number of SWF during my time in the industry I know that they employ some top end talent at the moment, not just aged expats looking to while away their remaining years in the sun earning a fat pay cheque for little input. These funds now more than ever are making strategic plays with their reserves. as pointed out above they can afford to take a very long term view and have the kind of liquidity at their disposal that has our distressed financial instituitions falling over one another to welcome onto their books. Ultimately the financial sector greases the wheels of the entire global economy and when we move back into the boom times, these investors will be laughing all the way to the........... Add your comment » |
|||||||||||||||||
