Named the Kuwait Investment Authority (KIA), which is the sovereign wealth fund of the country, the entity, which helped Citibank (NYSE:C) with bailout funds, profited wildly when it recently sold its share in the company for $4.1 billion, pocketing a cool profit of $1.1 billion.
In the midst of the global crisis in January 2008, KIA bought $3 billion in preferred shares of the company, which later it converted to common shares. The performance since they invested in Citibank ended up being a nice 37 percent profit for their efforts.
It makes you wonder if Brazil regrets not acquiring a piece of Citibank when it was asked to, as they declined to take the giant bank up on the offer, according to Brazil’s energy minister Edison Lobao, who in November revealed that they had been approached by Citigroup.
Just a couple of months ago the Kuwait Investment Authority stated they had no plans to sell their shares in Citigroup, or in fact, in Bank of America (NYSE:BAC), which had shares in through their holdings in Merrill Lynch, which they acquired a stake of $2 billion in before the acquisition by BofA. They cited a long term timeline for investing as their major impetus behind the thought they wouldn’t sell either of their holdings in the banks.
Even so, that seems to have changed recently from growing pressure from terrible performance of some of their other holdings, which the selling of their shares in Citigroup is evidently being done in order to increase confidence in the KIA, which has been shaken lately.
Citigroup shares recently closed at above $17 a share, after plummeting below $5 in the early part of 2009.
Along with KIA, other sovereign wealth funds from a number of different countries, invested over $200 billion in banks based in the U.S. and Europe.
