Soveriegn Wealth Funds
Written by A Forex View From Afar on Tuesday, January 01, 2008Back to www.TheLFB.com
Morgan Stanley became the third top bank in a month to raise capital from a sovereign wealth fund after announcing higher-than-expected writedowns of $9.4bn because of subprime losses.
John Mack, chief executive, said that the $5bn capital injection from China Investment Corporation would bolster its balance sheet and strengthen its deep ties in China. It is the second Wall Street bank to find a big Chinese investor, following in the footsteps of Bear Stearns.
China’s newly formed sovereign wealth fund, which earlier this year paid $3bn for 10 per cent of Blackstone, the US private equity group, will get a stake of up to 9.9 per cent in Morgan Stanley.
Morgan Stanley does not foresee any political or regulatory concerns about the investment. The deal underlines the growing importance of sovereign wealth funds in the Middle East and Asia, and their increasingly bold moves to take advantage of the need for capital among western financial institutions.
0 comments: Responses to “ Soveriegn Wealth Funds ”