atans1

Temasek the hedge fund?

In Banks, China, Temasek on 01/09/2011 at 8:29 am

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

http://www.nytimes.com/reuters/2011/08/30/business/business-us-bankofamerica-ccb.html?nl=business&emc=dlbka32

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  1. 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.

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