Emirati sovereign wealth fund the Qatar Investment Authority is considering picking up part of the US Treasury’s stake in Citigroup, according to reports.
Citi was bailed out by the US government after losing $50bn in the financial crisis, leaving the Treasury with a 36 per cent stake in the financial services company, which was reduced to $27bn after Citi launched a $21bn share sale in February 2009.
According to people familiar with the situation, quoted in the Financial Times, any deal would depend on price, market conditions and the government’s willingness to sell Citi shares to a sovereign wealth fund at a discount. The Qatar Investment Authority had reportedly been approached about the potential sale.
The news follow the Treasury’s announcement last month that it will sell off its 7.7 billion shares in Citi. One and a half billion are to be sold off in the market by Morgan Stanley, but no word was given on how the rest will be disposed of.
Sovereign funds have shied away from investments in banks after the failure of previous deals to produce a profit, but QIA has had strong results from its investments in Credit Cuisse and Barclays during the downturn.
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