Merrill Lynch & Co.'s Craig Lipsay, one of two U.S. executives overseeing sales of investments linked to bonds, currencies and interest rates, has left the firm as part of an overhaul of its fixed-income division, three people familiar with the matter said.
Lipsay, 44, was co-head of the Strategic Solutions Group, a unit of about 70 people who sold so-called derivatives, said the people, who declined to be identified because Merrill hasn't announced his departure. He left Feb. 1, eight months after being hired from Morgan Stanley under a contract guaranteeing his pay for two years. Other members of his team are being reassigned, the people said.
Chief Executive Officer John Thain, 52, who joined Merrill in December following the ouster of Stan O'Neal, is retooling the fixed-income business after mortgage-related losses last year saddled the third-largest U.S. securities firm with a $7.8 billion loss. At least 20 traders and bankers in the division have lost their jobs or quit in the past two months.
``With all the things that happened in the credit crisis, they're going to really analyze who's leading the ship in every area,'' said Jeanne Branthover, a managing director at Boyden Global Executive Search in New York who represents current and former Merrill employees looking for jobs.
Lipsay, reached by telephone, confirmed that he left New York-based Merrill on Feb. 1 and declined to comment further. Company spokeswoman Jessica Oppenheim declined to comment.
He was hired in June 2007 from Morgan Stanley, the second- largest U.S. securities firm, where he had worked since 1996, according to regulatory records. He previously worked at Citigroup Inc. and Kidder, Peabody & Co., the records show.
Reversal of Fortune
Lipsay's short tenure at Merrill underscores how quickly fortunes have turned for traders, bankers and salesmen who specialized in securities and loans infected by surging defaults on subprime mortgages. The biggest banks and securities firms have reported at least $146 billion of writedowns and credit losses since the beginning of last year, according to data compiled by Bloomberg.
Merrill's Strategic Solutions Group oversaw sales of collateralized debt obligations, or CDOs, which are investments packaged from mortgage bonds, loans and other forms of debt and sold with a range of credit ratings. CDOs lost their allure last year as the U.S. housing market slumped and more borrowers fell behind on monthly payments, causing investors to shun securities linked to mortgages.
CDO Writedowns
Merrill was the biggest underwriter of CDOs in 2006, packaging about $55 billion of the securities, according to Thomson Financial. Writedowns on CDOs and subprime mortgages led to a $9.8 billion fourth-quarter loss, the widest in the firm's 94-year history. O'Neal stepped down in October after a $2.24 billion third-quarter loss that also included CDO writedowns.
David Sobotka, who had been head of commodities trading based in Houston, was named the worldwide head of fixed-income last year after the dismissal of the group's previous leader, Osman Semerci. Doug Mallach, head of fixed-income sales in the U.S., previously reported to Semerci and now reports to Sobotka.
Mallach, who hired Lipsay last year, referred a call to Oppenheim, who declined to comment on his behalf.
Merrill is a passive, minority investor in Bloomberg LP, the parent of Bloomberg News.
Barclays' 2007 Pre-Tax Profit Slips
Barclays reported a pre-tax profit of 7.08 billion pounds sterling ($13.8 billion) in 2007, down from 7.14 billion pounds sterling a year ago, and the firm increased its dividend for the year to 34 pence from 31 pence in 2006.
Profits before tax within Barclays Capital, the investment banking business, were 2.34 billion sterling in 2007, up 5% from 2.22 billion sterling in 2006. The banking giant’s asset management business, Barclays Wealth, saw a 25% jump in profit last year to 307 million pounds sterling from 245 million in 2006. Income growth within the unit was 11%, driven by increased client funds and greater transaction volumes.
The British banking giant said credit market exposures resulted in net losses of 1.64 billion pounds sterling. “The net losses primarily related to ABS CDO super senior exposures, with additional losses from other credit market exposures partially offset by gains from the general widening of credit spreads on issued notes held at fair value,” the bank said.
Barclays said collateral for ABS CDO super senior exposures primarily comprised residential mortgage backed securities. Seventy-nine percent of the RMBS subprime collateral was 2005 or earlier vintages.
Within Barclays Capital, net income was driven by strong performance in interest rates, currency and equity products and commodity businesses.
Robert Diamond, head of Barclays Capital, told IDD Tuesday that “the interest rate businesses, notwithstanding the difficult market conditions, were up 76%, which is a stunning number. The currency businesses were up 60%. Our businesses in Asia doubled. Our business in Africa doubled. So we had a really strong underlying performance of the business.”
Diamond added that the banking firm’s interest rate and currency businesses were active in the wake of the credit market turmoil last summer.
“The volumes of business we were doing in July and August, September and October, during the worst of the crisis, were at record levels. A lot of those flows were coming from Asia,” said Diamond. “So much of the wealth created in the Asian central banks and the sovereign funds was moving aggressively into interest rates and against the dollar.”
Profits before tax within Barclays Capital, the investment banking business, were 2.34 billion sterling in 2007, up 5% from 2.22 billion sterling in 2006. The banking giant’s asset management business, Barclays Wealth, saw a 25% jump in profit last year to 307 million pounds sterling from 245 million in 2006. Income growth within the unit was 11%, driven by increased client funds and greater transaction volumes.
The British banking giant said credit market exposures resulted in net losses of 1.64 billion pounds sterling. “The net losses primarily related to ABS CDO super senior exposures, with additional losses from other credit market exposures partially offset by gains from the general widening of credit spreads on issued notes held at fair value,” the bank said.
Barclays said collateral for ABS CDO super senior exposures primarily comprised residential mortgage backed securities. Seventy-nine percent of the RMBS subprime collateral was 2005 or earlier vintages.
Within Barclays Capital, net income was driven by strong performance in interest rates, currency and equity products and commodity businesses.
Robert Diamond, head of Barclays Capital, told IDD Tuesday that “the interest rate businesses, notwithstanding the difficult market conditions, were up 76%, which is a stunning number. The currency businesses were up 60%. Our businesses in Asia doubled. Our business in Africa doubled. So we had a really strong underlying performance of the business.”
Diamond added that the banking firm’s interest rate and currency businesses were active in the wake of the credit market turmoil last summer.
“The volumes of business we were doing in July and August, September and October, during the worst of the crisis, were at record levels. A lot of those flows were coming from Asia,” said Diamond. “So much of the wealth created in the Asian central banks and the sovereign funds was moving aggressively into interest rates and against the dollar.”
JPMorgan to Funnel $750 Million into Asia Private Equity Fund
JPMorgan Chase announced a major push on Monday into private-equity investing in Asia, saying it had earmarked at least $750 million of its own capital to take minority stakes in businesses in a region where buyouts are notoriously difficult.
The expansion will be headed by Varun Bery and John Troy, co-founders of an Asia-focused private equity firm, TVG Capital Partners, who will join JPMorgan as managing directors. Their team will look for opportunities to invest in ventures with existing corporate clients in a broad range of sectors, including consumer, retail, industrial, health care and natural resources.
TVG, which has offices in Hong Kong, Bangalore and Sydney and manages more than $700 million in capital, is being wound down, according to Reuters.
JPMorgan said it would allow its corporate and financial sponsor clients to put their own capital together with that of the bank to “co-invest” in the opportunities it finds.
The new team will be the Asia arm of JPMorgan’s Private Equity Principal Investments business, which is led by Bob Case from New York. JPMorgan has also invested in Asian private equity through its units One Equity Partners and Principal Investment Management.
Private equity funds run by the likes of Morgan Stanley, the Blackstone Group and the Carlyle Group are ratcheting up their investments in the fast-growing Indian and Chinese markets as a global credit crunch hampers big buyouts in Europe and the United States.
But in a region where full-scale buyouts are often frowned upon and are difficult because families are still the main players in business, funds have had to settle mostly for taking minority stakes.
The expansion will be headed by Varun Bery and John Troy, co-founders of an Asia-focused private equity firm, TVG Capital Partners, who will join JPMorgan as managing directors. Their team will look for opportunities to invest in ventures with existing corporate clients in a broad range of sectors, including consumer, retail, industrial, health care and natural resources.
TVG, which has offices in Hong Kong, Bangalore and Sydney and manages more than $700 million in capital, is being wound down, according to Reuters.
JPMorgan said it would allow its corporate and financial sponsor clients to put their own capital together with that of the bank to “co-invest” in the opportunities it finds.
The new team will be the Asia arm of JPMorgan’s Private Equity Principal Investments business, which is led by Bob Case from New York. JPMorgan has also invested in Asian private equity through its units One Equity Partners and Principal Investment Management.
Private equity funds run by the likes of Morgan Stanley, the Blackstone Group and the Carlyle Group are ratcheting up their investments in the fast-growing Indian and Chinese markets as a global credit crunch hampers big buyouts in Europe and the United States.
But in a region where full-scale buyouts are often frowned upon and are difficult because families are still the main players in business, funds have had to settle mostly for taking minority stakes.
Tommy Lee, Goldman Sponsor MoneyGram Recap
Thomas H. Lee Partners and Goldman Sachs have sponsored a leveraged recapitalization of MoneyGram International.
Boston’s Thomas H. Lee and GS Capital, the New York private equity arm of Goldman Sachs, will invest $710 million for common and preferred stock in the Minneapolis wire-transfer, bill-payment and money-order arranger. The investors will receive convertible preferred stock paying 20% interest until it is converted, which will equal a 19.9% common stock stake upon conversion.
The investors also have an option to invest an additional $65 million of equity in MoneyGram, which has secured committed senior second lien debt financing of up to $500 million, payable at 13.25% over a 10-year term, from Goldman Sachs. In addition, MoneyGram may secure an additional $200 million of debt, priced up to 625 basis points over Libor as part of the closing condition, prior to the deal’s closing.
Philip Milne, president and chief executive of MoneyGram, said in a statement that the transaction will provide the company with the “necessary additional capital to significantly strengthen its balance sheet.”
Officials from Thomas H. Lee and GS Capital did not return calls.
JPMorgan Securities and Duff & Phelps served as financial advisors to MoneyGram, which announced the deal on Tuesday, and provided a fairness opinion to MoneyGram’s board, which approved the transaction on Monday. JPMorgan Securities also served as placement agent for MoneyGram.
The deal calls for MoneyGram, a $442.9 million market-capitalized company, to sell additional investment portfolio assets. In January, the company announced it had valued its portfolio after assessing $860 million in losses from its investment portfolio, primarily due to losses on asset-backed securities. MoneyGram sold $1.3 billion of securities in January, the same month it disclosed that the company was engaged in discussions with Thomas H. Lee and investors, and by Feb. 11 it had sold $1.8 billion of portfolio securities.
MoneyGram, which has a go-shop period in its agreement with the private equity investors to review other prospective financing proposals, is planning to obtain amendments on $350 million of available borrowings under its existing credit line. In January, it said that its lenders had agreed to waive certain defaults that were related to its portfolio losses.
The company has also secured an existing financial services agreement with Wal-Mart to continue providing bill payment, money transfer and money order services at more than 3,500 stores through January 2013.
MoneyGram’s shares were recently trading at $5.35, little changed from the previous day's close. The company’s stock has traded in a range of $3.68 to $30.85 a share over the past year.
A business with 143,000 locations in 170 countries and territories, MoneyGram disclosed that it paid a hefty $37.5 million in transaction fees to Thomas H. Lee and Goldman Sachs in connection with the recapitalization.
Boston’s Thomas H. Lee and GS Capital, the New York private equity arm of Goldman Sachs, will invest $710 million for common and preferred stock in the Minneapolis wire-transfer, bill-payment and money-order arranger. The investors will receive convertible preferred stock paying 20% interest until it is converted, which will equal a 19.9% common stock stake upon conversion.
The investors also have an option to invest an additional $65 million of equity in MoneyGram, which has secured committed senior second lien debt financing of up to $500 million, payable at 13.25% over a 10-year term, from Goldman Sachs. In addition, MoneyGram may secure an additional $200 million of debt, priced up to 625 basis points over Libor as part of the closing condition, prior to the deal’s closing.
Philip Milne, president and chief executive of MoneyGram, said in a statement that the transaction will provide the company with the “necessary additional capital to significantly strengthen its balance sheet.”
Officials from Thomas H. Lee and GS Capital did not return calls.
JPMorgan Securities and Duff & Phelps served as financial advisors to MoneyGram, which announced the deal on Tuesday, and provided a fairness opinion to MoneyGram’s board, which approved the transaction on Monday. JPMorgan Securities also served as placement agent for MoneyGram.
The deal calls for MoneyGram, a $442.9 million market-capitalized company, to sell additional investment portfolio assets. In January, the company announced it had valued its portfolio after assessing $860 million in losses from its investment portfolio, primarily due to losses on asset-backed securities. MoneyGram sold $1.3 billion of securities in January, the same month it disclosed that the company was engaged in discussions with Thomas H. Lee and investors, and by Feb. 11 it had sold $1.8 billion of portfolio securities.
MoneyGram, which has a go-shop period in its agreement with the private equity investors to review other prospective financing proposals, is planning to obtain amendments on $350 million of available borrowings under its existing credit line. In January, it said that its lenders had agreed to waive certain defaults that were related to its portfolio losses.
The company has also secured an existing financial services agreement with Wal-Mart to continue providing bill payment, money transfer and money order services at more than 3,500 stores through January 2013.
MoneyGram’s shares were recently trading at $5.35, little changed from the previous day's close. The company’s stock has traded in a range of $3.68 to $30.85 a share over the past year.
A business with 143,000 locations in 170 countries and territories, MoneyGram disclosed that it paid a hefty $37.5 million in transaction fees to Thomas H. Lee and Goldman Sachs in connection with the recapitalization.
Credit Suisse Appoints New Head of I-Banking
Credit Suisse announced the appointment of Jim Amine as co-head of its global investment banking department and head of its global markets solutions group (GMSG), effective today.
Amine is based in London and reports to Paul Calello, chief executive of Credit Suisse's investment bank. He previously served as the firm's co-head of global leveraged finance and European GMSG head.
Amine replaces Eric Varvel, who became CEO of Europe, the Middle East and Africa last month.
Marc Granetz continues as co-head of global investment banking and global head of M&A.
"Jim brings to the role more than 20 years of investment banking experience and a thorough understanding of the international capital markets," Calello said in a release. "With his broad experience across international markets and unparalleled client focus, Jim is ideally suited to lead our GMSG and investment banking platforms to the next level of success. Importantly, the fact that Jim will be based in London reflects our strong and diversified global business mix. We will continue to recognize and appoint leadership and management in all of our key global markets."
Amine joined Credit Suisse in 1997 after stints at Schroders and Merrion Group. Earlier in his career, he was a lawyer at Cravath, Swaine & Moore, where he focused on M&A and acquisition financing.
Credit Suisse disclosed its fourth-quarter and full-year earnings on Tuesday. The firm's investment banking division recorded 2007 income before taxes of $4.38 billion, a 19% decrease from 2006.
Credit Suisse was ranked sixth in Thomson Financial's league table of top global financial advisors for 2007, having placed seventh in 2006. The firm advised on 379 deals worth $871.1 billion last year, according to Thomson.
Amine is based in London and reports to Paul Calello, chief executive of Credit Suisse's investment bank. He previously served as the firm's co-head of global leveraged finance and European GMSG head.
Amine replaces Eric Varvel, who became CEO of Europe, the Middle East and Africa last month.
Marc Granetz continues as co-head of global investment banking and global head of M&A.
"Jim brings to the role more than 20 years of investment banking experience and a thorough understanding of the international capital markets," Calello said in a release. "With his broad experience across international markets and unparalleled client focus, Jim is ideally suited to lead our GMSG and investment banking platforms to the next level of success. Importantly, the fact that Jim will be based in London reflects our strong and diversified global business mix. We will continue to recognize and appoint leadership and management in all of our key global markets."
Amine joined Credit Suisse in 1997 after stints at Schroders and Merrion Group. Earlier in his career, he was a lawyer at Cravath, Swaine & Moore, where he focused on M&A and acquisition financing.
Credit Suisse disclosed its fourth-quarter and full-year earnings on Tuesday. The firm's investment banking division recorded 2007 income before taxes of $4.38 billion, a 19% decrease from 2006.
Credit Suisse was ranked sixth in Thomson Financial's league table of top global financial advisors for 2007, having placed seventh in 2006. The firm advised on 379 deals worth $871.1 billion last year, according to Thomson.
Carlyle Unveils Wave of Promotions
The Carlyle Group has promoted 30 executives to senior positions in the company, eight to managing director – the most senior role below those of senior adviser, founder and chairman – and 22 to director.
The promotions include 15 in North America - including seven in Washington, six in New York and two in Mexico. There were 11 in Europe, including one in Poland, and four in Asia.
Jonathan Bylin and Jim McGee, senior staff in investor relations, were among those promoted to the role of managing director in New York taking Carlyle’s stable of senior investor relations employees to 13 globally across its 57 active funds.
Last year Carlyle raised a €5.35bn ($7.8bn) European buyout fund as well as $1.15bn for infrastructure investments in the US and Canada, and it is also currently raising a real estate fund and Middle Eastern fund.
Investing across four investment disciplines - buyouts, venture and growth capital, real estate and leveraged finance, the group has a total of $75.6bn in funds under management.
Among the newly promoted managing directors was Vladimir Lasocki, who focuses on the group’s investments in Central and Eastern Europe from offices in Warsaw.
Lasocki is currently a member of the board of directors of Belgian portfolio company Transics International, which Carlyle bought in 2006 and Wall Street Institute Education, a provider of English language tuition.
The following is the full list of promotions for the firm:
• New managing directors
Janet Andre – administration; Washington, DC
Gary Bleiberg – accounting for US leveraged finance; New York
Jonathan Bylin – investor relations; New York
Patricia Gallagher – accounting for equity; Washington, DC
Hayden Jones – real estate; Washington, DC
Robert Konigsberg – accounting for global real estate; Washington, DC
Vladimir Lasocki – Central Eastern Europe buyouts; Warsaw
Jim McGee – investor relations; New York
• New principals/directors
Zeina Bain – Europe buyouts; London
Nicolas Debetencourt – global infrastructure buyouts; New York
Nilesh Desai – European leveraged finance; London
Pierre-Olivier Desplanches – Europe buyouts; Paris
Cam Dyer – US buyouts; Charlotte, NC
Rodrigo Fonseca – Mexico buyout; Mexico City
Mark Harris – Europe real estate; London
Chris Hodges – Europe technology; London
Brannan Johnston – US leveraged finance; New York
Rachel Lupiani – Europe real estate; Barcelona,Paris
Edward Man – Asia buyout; Hong Kong
Thomas Mayrhofer – Corporate development; Washington, DC
Nazo Moosa – Europe technology; London
Nancy Palleschi – Investor relations for global conference and events; Washington, DC
Adrian Siew – Asia buyout; Sydney
Charles Steel – Europe buyout; London
Miguel Valenzuela – Mexico buyout; Mexico City
Elliot Wagner – US buyout; Washington, DC
Carolyn Weimer – Investor relations and strategic resources; Washington, DC
Jonathan Zafrani – Europe buyouts; Paris
Elena Zhang – Asia growth capital; Hong Kong
Eric Zhang – Asia buyout; Hong Kong
The promotions include 15 in North America - including seven in Washington, six in New York and two in Mexico. There were 11 in Europe, including one in Poland, and four in Asia.
Jonathan Bylin and Jim McGee, senior staff in investor relations, were among those promoted to the role of managing director in New York taking Carlyle’s stable of senior investor relations employees to 13 globally across its 57 active funds.
Last year Carlyle raised a €5.35bn ($7.8bn) European buyout fund as well as $1.15bn for infrastructure investments in the US and Canada, and it is also currently raising a real estate fund and Middle Eastern fund.
Investing across four investment disciplines - buyouts, venture and growth capital, real estate and leveraged finance, the group has a total of $75.6bn in funds under management.
Among the newly promoted managing directors was Vladimir Lasocki, who focuses on the group’s investments in Central and Eastern Europe from offices in Warsaw.
Lasocki is currently a member of the board of directors of Belgian portfolio company Transics International, which Carlyle bought in 2006 and Wall Street Institute Education, a provider of English language tuition.
The following is the full list of promotions for the firm:
• New managing directors
Janet Andre – administration; Washington, DC
Gary Bleiberg – accounting for US leveraged finance; New York
Jonathan Bylin – investor relations; New York
Patricia Gallagher – accounting for equity; Washington, DC
Hayden Jones – real estate; Washington, DC
Robert Konigsberg – accounting for global real estate; Washington, DC
Vladimir Lasocki – Central Eastern Europe buyouts; Warsaw
Jim McGee – investor relations; New York
• New principals/directors
Zeina Bain – Europe buyouts; London
Nicolas Debetencourt – global infrastructure buyouts; New York
Nilesh Desai – European leveraged finance; London
Pierre-Olivier Desplanches – Europe buyouts; Paris
Cam Dyer – US buyouts; Charlotte, NC
Rodrigo Fonseca – Mexico buyout; Mexico City
Mark Harris – Europe real estate; London
Chris Hodges – Europe technology; London
Brannan Johnston – US leveraged finance; New York
Rachel Lupiani – Europe real estate; Barcelona,Paris
Edward Man – Asia buyout; Hong Kong
Thomas Mayrhofer – Corporate development; Washington, DC
Nazo Moosa – Europe technology; London
Nancy Palleschi – Investor relations for global conference and events; Washington, DC
Adrian Siew – Asia buyout; Sydney
Charles Steel – Europe buyout; London
Miguel Valenzuela – Mexico buyout; Mexico City
Elliot Wagner – US buyout; Washington, DC
Carolyn Weimer – Investor relations and strategic resources; Washington, DC
Jonathan Zafrani – Europe buyouts; Paris
Elena Zhang – Asia growth capital; Hong Kong
Eric Zhang – Asia buyout; Hong Kong
Citi Stops Withdrawals From CSO Partners Fund
The troubles continue for Citigroup’s alternative investment arm, with its CSO Partners barring investors from withdrawing money from the hedge fund.
“We have temporarily suspended redemptions of all shares of CSO to stabilize the fund and allow time to address its funding needs to meet anticipated obligations," says Jon Diat, spokesman for Citi, in an email statement to IDD. “All (Citigroup Alternative Investments) funds are subject to comprehensive internal fiduciary risk oversight, risk management practices and senior level management supervision.”
The single-manager fund, launched in 2004 and specializing in credit-oriented and event-driven strategies, suspended redemptions after investors tried to pull more than 30% of the fund’s roughly $500 million in assets, according to the Wall Street Journal. The fund had losses of 11% last year, and Citi infused $100 million last month.
Last December, manager John Pickett left over reported differences about his putting a large sum of money in one investment that went bad.
Citi’s $2.4 trillion alternative-investment division, which CEO Vikram Pandit once ran, has other hedge funds that are posting mediocre performance. Falcon Plus Strategies posted a 30% decline last year, and lost 52% in the fourth quarter alone after placing bad bets on mortgage-backed and preferred securities. Old Lane Partners, which was founded by Pandit and acquired by Citi last had a loss of 1.8% last month.
“We have temporarily suspended redemptions of all shares of CSO to stabilize the fund and allow time to address its funding needs to meet anticipated obligations," says Jon Diat, spokesman for Citi, in an email statement to IDD. “All (Citigroup Alternative Investments) funds are subject to comprehensive internal fiduciary risk oversight, risk management practices and senior level management supervision.”
The single-manager fund, launched in 2004 and specializing in credit-oriented and event-driven strategies, suspended redemptions after investors tried to pull more than 30% of the fund’s roughly $500 million in assets, according to the Wall Street Journal. The fund had losses of 11% last year, and Citi infused $100 million last month.
Last December, manager John Pickett left over reported differences about his putting a large sum of money in one investment that went bad.
Citi’s $2.4 trillion alternative-investment division, which CEO Vikram Pandit once ran, has other hedge funds that are posting mediocre performance. Falcon Plus Strategies posted a 30% decline last year, and lost 52% in the fourth quarter alone after placing bad bets on mortgage-backed and preferred securities. Old Lane Partners, which was founded by Pandit and acquired by Citi last had a loss of 1.8% last month.
Qatar Acquiring Credit Suisse Shares
The Qatar Investment Authority (QIA) is buying up shares in Credit Suisse, the Qatari prime minister said in an interview with Bloomberg on Monday.
"We have a relation with Credit Suisse and we bought some of the stock from the market, actually, but I cannot say what percentage because still we are in the process," Sheikh Hamad bin Jassem bin Jabr Al Thani, who is QIA chief executive as well as the Gulf state's prime minister and foreign minister, told Bloomberg.
The interview with Bloomberg's TV channel took place prior to the opening of the Brookings Institution's branch in Doha, the Qatari capital
The sheikh also sounded off on the controversy surrounding sovereign wealth funds: "The sovereign fund is from friendly countries, especially this region. They have no political ambitions. They are looking to invest their wealth for the people of these countries."
In addition, he revealed the QIA will create $1 billion funds to invest in Finland and Malaysia (similar to the one the Qatari government's investment arm announced it would establish for Indonesia in December) and that the QIA could invest up to $15 billion in US and European banks over the next year.
Large US and European banks have been building stronger ties with Qatar since 2005, when the Gulf state founded the Qatar Financial Center in Doha.
Credit Suisse, which released full-year and fourth-quarter 2007 financial results last Tuesday, was one of three European banks which offered to underwrite the proposed buyout of UK supermarket chain operator J Sainsbury by the QIA and London-based Three Delta LLP last year, according to Bloomberg. The QIA and Three Delta announced they withdrew their bid on Nov. 5.
"We have a relation with Credit Suisse and we bought some of the stock from the market, actually, but I cannot say what percentage because still we are in the process," Sheikh Hamad bin Jassem bin Jabr Al Thani, who is QIA chief executive as well as the Gulf state's prime minister and foreign minister, told Bloomberg.
The interview with Bloomberg's TV channel took place prior to the opening of the Brookings Institution's branch in Doha, the Qatari capital
The sheikh also sounded off on the controversy surrounding sovereign wealth funds: "The sovereign fund is from friendly countries, especially this region. They have no political ambitions. They are looking to invest their wealth for the people of these countries."
In addition, he revealed the QIA will create $1 billion funds to invest in Finland and Malaysia (similar to the one the Qatari government's investment arm announced it would establish for Indonesia in December) and that the QIA could invest up to $15 billion in US and European banks over the next year.
Large US and European banks have been building stronger ties with Qatar since 2005, when the Gulf state founded the Qatar Financial Center in Doha.
Credit Suisse, which released full-year and fourth-quarter 2007 financial results last Tuesday, was one of three European banks which offered to underwrite the proposed buyout of UK supermarket chain operator J Sainsbury by the QIA and London-based Three Delta LLP last year, according to Bloomberg. The QIA and Three Delta announced they withdrew their bid on Nov. 5.
Bear and Citic Said to Renegotiate Deal
U.S. investment bank Bear Stearns and CITIC Securities, China's largest securities firm, are to revise a share swap agreement, increasing the stake in each other, according to sources close to the deal.
Ongoing talks are now focused on lowering convertible prices of each share without changing the fixed-investment scale. Each side is set to cut the price by the same extent, the source said.
After the price cut, CITIC would hold 9.9 percent of the U.S. bank, up from the previous six percent. As for Bear Stearns, the one billion U.S. dollars debt would convert to a 2.5 percent stakein the Shanghai-listed firm that would amount to 7.5 percent over time.
No information about the actual convertible prices or the extent of the price cut was available yet.
The revised plan is still under discussion and subject to regulatory approval. "If everything goes well, the plan will be made public in April after adjustment," Business Finance Review, a Beijing-based magazine, cited the source as saying on Thursday.
The adjustment came amid a share price slump for both sides after the agreement was sealed in October.
Bear Stearns, hit particularly hard by the worsening U.S. subprime mortgage crisis, has seen its shares drop to less than 80U.S. dollars from 120 U.S. dollars in October. Meanwhile, CITIC's stock is down nearly 36.4 percent.
Bear Stearns and CITIC Securities agreed in October to a cross-investment plan. Under the agreement, CITIC will invest one billion U.S. dollars for about six percent of Bear Stearns, while the U.S. bank is buying one billion U.S. dollars of CITIC Securities debt, which will amount to two percent stake.
The two sides plan to share management expertise and technologies to provide new products and services to get a bigger share of China's booming financial market.
They are also considering setting up a joint venture in Hong Kong to offer a large range of financial services across Asia.
Ongoing talks are now focused on lowering convertible prices of each share without changing the fixed-investment scale. Each side is set to cut the price by the same extent, the source said.
After the price cut, CITIC would hold 9.9 percent of the U.S. bank, up from the previous six percent. As for Bear Stearns, the one billion U.S. dollars debt would convert to a 2.5 percent stakein the Shanghai-listed firm that would amount to 7.5 percent over time.
No information about the actual convertible prices or the extent of the price cut was available yet.
The revised plan is still under discussion and subject to regulatory approval. "If everything goes well, the plan will be made public in April after adjustment," Business Finance Review, a Beijing-based magazine, cited the source as saying on Thursday.
The adjustment came amid a share price slump for both sides after the agreement was sealed in October.
Bear Stearns, hit particularly hard by the worsening U.S. subprime mortgage crisis, has seen its shares drop to less than 80U.S. dollars from 120 U.S. dollars in October. Meanwhile, CITIC's stock is down nearly 36.4 percent.
Bear Stearns and CITIC Securities agreed in October to a cross-investment plan. Under the agreement, CITIC will invest one billion U.S. dollars for about six percent of Bear Stearns, while the U.S. bank is buying one billion U.S. dollars of CITIC Securities debt, which will amount to two percent stake.
The two sides plan to share management expertise and technologies to provide new products and services to get a bigger share of China's booming financial market.
They are also considering setting up a joint venture in Hong Kong to offer a large range of financial services across Asia.
Hana Mulling Stake In Merrill
South Korea's Hana Bank is considering the purchase of an equity stake in Merrill Lynch, a spokesman for Hana's holding company told Dow Jones Newswires on Monday.
The news service also quoted an unnamed source as saying Hana is in talks with Singapore's Temasek Holdings to acquire one million Merrill shares for $50 million. "Hana and Temasek have reached an agreement, and the announcement of the deal will likely come sometime next month, with the deal closing [in March]," the source told Dow Jones. The Hana spokesman declined to comment to Dow Jones on what the unnamed source said.
Temasek held a 9.62% stake in Hana's holding company, Hana Financial Holdings, as of September
"If the reported terms are something under discussion, it sounds reasonable as Temasek may want to spread its risk from owning too high a stake in Merrill Lynch and Hana would be one of their closest contacts," Nomura Securities analyst Kim Jin-Sang told Dow Jones.
Merrill announced it would accept a $4.4 billion capital infusion from Temasek in December.
The news service also quoted an unnamed source as saying Hana is in talks with Singapore's Temasek Holdings to acquire one million Merrill shares for $50 million. "Hana and Temasek have reached an agreement, and the announcement of the deal will likely come sometime next month, with the deal closing [in March]," the source told Dow Jones. The Hana spokesman declined to comment to Dow Jones on what the unnamed source said.
Temasek held a 9.62% stake in Hana's holding company, Hana Financial Holdings, as of September
"If the reported terms are something under discussion, it sounds reasonable as Temasek may want to spread its risk from owning too high a stake in Merrill Lynch and Hana would be one of their closest contacts," Nomura Securities analyst Kim Jin-Sang told Dow Jones.
Merrill announced it would accept a $4.4 billion capital infusion from Temasek in December.
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