|
London: The purchases of stakes in Wall Street firms by Asian and Middle Eastern sovereign wealth funds (SWFs) followed lobbying in the US on behalf of both the funds and their targets, the Wall Street Journal reported.
The stakes, which were picked up in companies such as Citigroup Inc. and Merrill Lynch & Co., were bought for a total of $37 billion and further millions were spent on hectic lobbying, to ensure a welcome for the investments by the Bush administration and Congress, the newspaper said in its report.
The lobbyists included Washington veterans of both parties, including Republican fund-raiser Wayne Berman, the Journal said.
Some economists warn that the stakes may give overseas governments a say in how US companies do business, or provide them with access to sensitive information or technology, the newspaper said.
Incentive
However, foreign government funds have an incentive to be passive investors, to avoid stirring up opposition to their stakes, whereas US investors such as hedge funds might muscle in on management, the Journal said.
Merrill Lynch turned down possible investments from hedge funds in favour of those from sovereign wealth funds from South Korea and Kuwait, the newspaper added, citing unidentified people involved with negotiations.
Merrill is a passive minority investor in Bloomberg LP, the parent of Bloomberg News.
The subprime crisis resulted in huge writedown for US banks, making them cheaper and thus attractive investment propositions.
|
