atans1

GIC: A dog of an investment

In GIC, Private Equity on 24/02/2012 at 6:14 am

BAA made a loss as debt payments mount. Rising interest payments on BAA’s debts turned the operating profit of £572m into a pre-tax loss of £256m – a £60m improvement on its 2010 losses.

http://www.guardian.co.uk/business/2012/feb/22/baa-loss-debt-interest-payments

GIC is a one of three members of a consortium that won a bid for BAA, valuing it at £10.3bn in June 2006. The investment went almost immediately wrong. Fortunately, GIC’s initial stake stake was  a peanutty 5-10%. The exact %age has never been disclosed.

Still it is no surprise that Reuters reports that GIC  “is selling US$750 million of private equity and other funds it no longer wants to invest in, and will redeploy the money to other better-performing managers, according to sources familiar with the matter”.

To be fair,”sovereign wealth funds and pension funds are pruning their exposure to alterative assets such as private equity amid the economic downturn”. Taz the problem when one tries to be hip and sassy.

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