from Follow the Money


July 26, 2007

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Blog posts represent the views of CFR fellows and staff and not those of CFR, which takes no institutional positions.

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OK, SAC-Temasek seems a bit more likely.   But SAC (A big hedge fund) does seem to be marketing itself to a range of Asian state investors.

“SAC has been marketing possible stakes in its management company to foreign investors including Asian state funds such as Temasek of Singapore.”

That is why the FT’s headline (the sale to private investors bit) seemed off.    State funds aren’t quite private investors, at least not in the classic sense.  

A lot of big official investors are buying in to their money managers – or, in China’s case, perhaps buying into their future money managers.  Think:

  • CIC-Blackstone
  • ADIA-Apollo
  • CDB-Barclays

The FT again

Many of the stakes are being bought by cash-rich investors in Asia and the Middle East.

Too bad all the GCC countries and China seem to be devoting more energy to finding new ways to manage their money rather than finding new ways to manage their exchange rates ... 

But unless something changes in the US debt markets, a lot of market actors who depend on leverage and liquidity may not prove to be all that great an investment.

My own personal theory is that the Wall Street-GCC-CIC-Singapore financial alliance really got started with China’s sale of minority stakes in its big commercial banks.   Big American and European banks, Singapore's Temasek and the Gulf investment funds (not just ADIA) all were all among the early investors in China's state commercial banks.   And they all did very well out of the process.

The same names that did the ICBC, CCB and BoC deals keep popping up.  Then again, the same names also may keep popping up simply because they really do have a lot of money. 

And unlike some folks on the Street right now, the big government funds are also very liquid.  

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