China Investment Corp buys $5 bln in M. Stanley units
NEW YORK, Dec 19 (Reuters) - Morgan Stanley (MS.N) said on Wednesday that Chinese sovereign wealth fund China Investment Corp Ltd was buying $5 billion in equity units which are convertible to stock in the brokerage.
The Chinese fund, will end up with 9.9 percent or less of Morgan Stanley's total outstanding shares, and will be a passive financial investor, the brokerage said.
"The investment from CIC will help to strengthen our deep ties in those growth markets and ensure that Morgan Stanley has the resources necessary to pursue growth opportunities globally...," Morgan Stanley Chief Executive John Mack said in a statement.
The investment came as Morgan Stanley announced higher-than-expected writedowns of $9.4 billion on subprime and other mortgage related debt.
The investment is the latest in a series of high-profile stakes taken by sovereign wealth funds in U.S. financial institutions as they seek fresh capital amid billions of dollars in mortgage-related writedowns.
China launched the $200 billion sovereign wealth fund in Sept with a focus on financial products in overseas markets. Headed by former vice finance minister Lou Jiwei, the fund has a $3 billion stake in U.S. private equity house Blackstone Group (BX.N). (Reporting by Christian Plumb, editing by Dave Zimmerman)
