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Reply #103: Sovereign wealth funds seen a boon to UK asset mgt [View All]

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Ghost Dog Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Mar-10-08 01:14 PM
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103. Sovereign wealth funds seen a boon to UK asset mgt
Edited on Mon Mar-10-08 01:21 PM by Ghost Dog
LONDON, March 10 (Reuters) - Sovereign wealth funds present little threat to the fund management industry, despite fears over their strategic intentions, but rather offer opportunities for asset growth, British fund executives said on Monday.

Sovereign funds, which in total run an estimated $1.9 trillion to $2.9 trillion, such as Temasek and the Government of Singapore Investment Corp (GIC) have made high-profile investments in U.S. financial institutions such as Citigroup and Merrill Lynch , who sought billions of dollars after suffering huge subprime-related losses.

The investments have raised concerns that foreign governments might be investing for political rather than financial gain, and might at some point use those stakes to advance their own national interests.

However, speaking at the Future of Fund Management conference in London, Robin Geffen, managing director of Neptune Investment Management, said he would welcome investment by sovereign wealth funds either in the firm's funds or in the firm itself. "We have absolutely no fear of them at all ... We'd be delighted to have them as clients. They show every sign of wanting to tap into Western expertise, as in the case of Blackstone (in which China Investment Corp made a $3 billion investment)," he said.

"We hope to get calls saying they want to invest, or maybe buy a small stake in us." Last week U.S. officials testifying before a U.S. House of Representatives financial services subcommittee said sovereign wealth funds were a good thing but could be more transparent.

Edward Bonham Carter, chief executive and chief investment officer of Jupiter Asset Management, said London should benefit as foreign governments look to learn from its position as a hub for the funds industry.


Expertise, huh. So (apart from moral and other practical issues) how much did, for example, China Investment Corp lose on the Blackstone deal, so far? - viz:

China losing heavily on Blackstone investment
Saturday, July 28, 2007

Billsedue is looking thoroughly at the first endavour of the Chinese central government in the international investment and wonders whether they have been screwed.

China's state foreign exchange investment company invested $3B in Blackstone's BX) IPO at a 4.5% discount, so they paid $29.605 per share. Blackstone's stock closed Friday at $24.30. China has on paper already lost 18% of its investment, or approximately $540m.

China has effectively lost half a billion US dollar in a month time: a painful way to reduce the trade surplus.


CIC Suffers Huge Loss from Holding of Blackstone
Monday, February 18, 2008; Posted: 07:49 AM

BEIJING, Feb 18, 2008 (SinoCast via COMTEX) -- BX | news | PowerRating | PR Charts -- Blackstone Group L.P. (NYSE: BX), the first investment object of China Investment Corporation (CIC), saw its stock price fall to new low to USD 17.59 a share on February 12, driving the Chinese investor to suffer huge loss.

CIC, the sovereign wealth fund in China responsible for managing part of China's foreign exchange reserves, on May 2007 purchased a nearly 10% stake in the New York-listed company with about USD 3 billion in total or USD 29.605 a share.

However, stock price of Blackstone, the second largest private equity firm in the US, had been dropping after its listing, which shrank investment of CIC. The Chinese investor lost up to USD 1.218 billion on February 14, equivalent to about CNY 8.7 billion.

/.. /

ed. And, is it possible that the said Neptune Investment Management could be already underwater???

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