A consortium that includes Temasek and its wholly owned hedge fund Seatown Holdings has acquired a 5% stake in China Construction Bank it was reported on 30 August 2011
It had unloaded a portion of its own stake in the Chinese lender about a month ago, when, by my calculations, the price of CCB shares was abt 10% higher. And given that it bought the latest batch of shares at a discount, Temask could have made 20% on the sale and repurchase.
Gd trade.
Description of trades
Before management fees and carried interest, if I may add.
What carrying cost? It got paid for sale and then few weeks later paid for purchase.
First comment was made out of context, suggesting that captive fund managers always win regardless.
If we put the two trades side by side, then getting a sweetheart deal from BOA and selling simultaneously selling down existing holdings does not mean Temasek managers are brilliant – It simply meant they were offered the deal because of their size or connections. I doubt foresight or smarts had anything to do with it.
In fact, I speculate that BOA threw Temasek a bone for the financial embarrassment our mighty SWF suffered when Merrill Lynch was acquired.
Besides if someone were to offer you shares at a 10% discount to market, won’t it make you wonder whether it’s time to rebalance your portfolio and lock in gains?
http://www.google.com/finance?cid=662744
Temasek and Seatown were not the only placees. There were others who benefitted from the discount.