UPDATE 1-Kuwait to invest Citi sale proceeds abroad -paper

* Sovereign fund to invest Citi sale proceeds abroad

* No plans to shed more foreign assets in 2009

(Adds quotes, background)

KUWAIT, Dec 7 (Reuters) - Kuwait's sovereign wealth fund will invest the proceeds of a $4.1 billion sale of a stake in Citigroup (C.N) abroad and not in the local market, the Gulf state's finance minister said in remarks published on Monday.

The fund, Kuwait Investment Authority, has no plans to sell more foreign assets in the remaining three weeks of 2009, al-Rai newspaper reported Mustapha al-Shamali as saying.

"We have completed the (Citigroup) exit, which we were planning for some time, and we have no intention to carry out similar exits before year-end," Shamali told Rai.

On Sunday, the fund said it had sold its stake in Citigroup, making $1.1 billion in profit. [ID:nGEE5B506P]

KIA had converted the preferred stocks it owned in Citigroup to normal stocks and sold all of them for $4.1 billion.

The fund, which manages state assets in the world's fourth-biggest oil exporter, has come under fire from some lawmakers for investing $5 billion in Citi and Merrill Lynch. Merrill Lynch has since been bought by Bank of America (BAC.N).

The value of foreign assets managed by KIA fell by about 9 billion dinars ($31.6 billion) in the nine months to December 2008, due to the financial crisis, two lawmakers said in February after a government briefing. KIA managed assets worth about 49 billion dinars at Dec. 31, the MPs said.

The fund does not publish the size of its portfolio.

Shamali said the Citigroup stake sale was an assurance of KIA's good choice of investment opportunities, at the right time and right price.

Since October 2008, KIA has reduced exposure of its key Future Generations Fund to global equities markets, shifting assets to cash funds, the government said in January.

The fund is meant as a nest egg to cater for the country's expenditure needs once its oil runs out in several decades.

In May, Shamali said Kuwait was not reducing its dollar assets and was keeping some liquid assets to meet its budget requirements. [ID:nLF953828] (Reporting by Eman Goma; Editing by Inal Ersan/Will Waterman) ($1=0.2850 dinars)