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Kuwait City: State-owned Kuwait Investment Authority (KIA) is looking at more investments in the financial sector and might consider raising its stakes in US banks Citigroup and Merrill Lynch, its managing director said on Wednesday.
"We are in Visa and we are already looking into other opportunities," Bader Al Sa'ad said when asked whether KIA might be looking for opportunities in the financial industry where asset prices have fallen as a result of the credit crisis.
He said KIA might consider increasing its stake in US banks Merrill Lynch & Co and Citigroup Inc after it already invested $5 billion in the two banks' capital raising efforts in January.
Opportunity
"In Citi or Merrill, if there is good opportunity, we will look into it. Do we increase our stake? It all depends on the performance and strategy," said Sa'ad when asked whether KIA might raise its stakes in both troubled US banks.
Asset prices of banks and financial institution have fallen in industrialised economies as they grapple with the fallout of the credit crisis.
Gulf Arab states and companies spent about $60 billion on foreign assets last year, almost double the previous two years combined. State-run Abu Dhabi Investment Authority agreed in November to buy $7.5 billion of stock in Citigroup.
Sa'ad confirmed KIA, which manages the Gulf Arab state's vast oil-generated assets, invested about $800 million in the initial public offering of US credit card firm Visa Corp.
KIA also reached a deal with British Land Co Plc where it bought the Willis Building in London for £400 million, said Sa'ad.
"We bought the Willis Building for £400 million. It is already concluded," he said.
KIA had at least $213 billion of assets under management on March 31, 2007, the latest published figure.
Support to banks
As the global credit crisis deepens, major banks continue turning to sovereign wealth funds for capital injections.
Following is a rundown of major investment banks getting support from sovereign wealth funds, starting with the most recent:
- On Tuesday, Citigroup said it was privately raising $12.5 billion. The infusion nearly $7 billion from Singapore Investment Corp Pte, $3 billion from the Kuwait Investment Authority and an undisclosed amount from Saudi Prince Al Waleed Bin Talal, its largest individual shareholder.
- Also Tuesday, Merrill Lynch & Co Inc said it received a $6.6 billion investment from Kuwait, the Korean Investment Corp and Japan's Mizuho Financial Group Inc.
- On December 24, Merrill said it would boost its capital by raising up to $6.2 billion in a private placement with Singapore's Temasek Holdings and Davis Selected Advisors.
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