LONDON, March 18 (Reuters) - Driven by western banks' need
for fresh capital, investments made by sovereign wealth funds
reached $24.4 billion in the first two months this year, already
almost half the volume of last year, Dealogic data showed.
Sovereign funds, which totalled about $3 trillion globally,
saw their investment surge 165 percent to $48.5 billion in 2007,
compared with $19.2 billion in 2006 and $8.2 billion in 2005.
As the subprime crisis forces Wall Street and European banks
including Citi (C.N), Merrill Lynch MER.N, Morgan Stanley
(MS.N) and UBS (UBSN.VX) to make billions of dollars of
writedowns, sovereign wealth funds had injected $54 billion in
the financial sector since September, Dealogic data showed.
Singapore, which has $689 billion of funds under management
through Temasek Holdings [TEM.UL] and Government of Singapore
Investment Corp (GIC), had invested about $42 billion between
January 2007 and February 2008, accounting for 57 percent of the
total sovereign fund investments globally in the period.
That was followed by United Arab Emirates' $10.7 billion and
China's $8 billion.
But sovereign fund might be tightening the taps after seeing
shares plummet in firms in which they have invested.
Singapore, for example, saw Citi shares drop 30 percent
since it agreed to inject funds, along with Kuwait Investment
Authority and other private investors on Jan. 14. UBS (UBSN.VX)
shares plunged some 50 percent after GIC agreed to buy a 9
percent stake in the Swiss bank on Dec. 10.
Top 10 Sovereign Wealth Fund investment in financial sector
(between Jan. 2007 and Feb. 2008)
===========================================================
Target Size Investors
($bln)
Citi 12.5 GIC, Kuwait, private investors
UBS 11.5 GIC, Saudi Arabia
Cit 7.5 Abu Dhabi Investment Authority
Merrill 6.6 Kuwait, Mizuho, Korean Investment
Merrill 6.2 Temasek, Davis Selected Advisors
M.Stanley 5.0 China Investment Corp
Blackstone 3.0 China Investment Corp
Barclays 2.0 Temasek
StandChart 1.4 Temasek
Carlyle 1.4 Mubadala Development
*Source: Dealogic
(Reporting by Daisy Ku)
