For example, when the Qatar Investment Authority is considering investments, “Government of Singapore Investment Corp and Temasek are our first ports of calls,” says one QIA executive. The QIA invested alongside CIC [China’s premier SWF] in Canary Wharf, beginning a dialogue which executives say they intend to continue, FT reports.
Don’t recall any deals where GIC, Temasek co-invest with Qatar. Temasek, GIC giving Qataris the cold shoulder despite their better track record?
Moreover, these funds are becoming more discerning – since they have learned who is trustworthy, by virtue of making some expensive mistakes. For example, there is still a lot of bitterness about representations made when executives of Citi and Merrill Lynch (now part of Bank of America) sought rescue funds. “They were like used car dealers,” says one leading investor in the Merrill deal bitterly, referring to the dialogue with that firm.
When those rescue financings were first made, some sovereign investors in these deals were able to extract better terms than others, including anti-dilution provisions and the right to reset terms while others did not. Recently, KIA and GIC were able to partly salvage their investments by changing the terms, while Temasek disastrously sold its stake in Bank of America at the absolute bottom in February, locking in a multi-billion loss (in spite of the advice of some of its peers not to do so).
Those bitter experiences have not prompted the funds to entirely abandon their investments in the US. When Larry Fink needed to raise billions to help finance BlackRock’s purchase of Barclays Global Investors earlier this year, he was able to raise the money from GIC, CIC and the KIA in less than a day because they all know and trust him.