Kuwait’s sovereign wealth fund said on Sunday it had sold its stake in Citigroup Inc for a profit of $1.1 billion, becoming the latest Gulf investor to sell foreign shares as markets improve.
Kuwait Investment Authority (KIA) transferred the preferred stock it owned in Citigroup to common shares and sold all of them for $4.1 billion, KIA said in a statement.
KIA said it made a 37 percent return on its initial January 2008 investment of $3 billion in Citigroup’s preferred stock.
It did not disclose the number of shares it had sold or what it planned to do with proceeds from the sale. Citigroup’s stock closed at $4.12 on the New York Stock Exchange on Friday.
KIA follows Singapore’s wealth fund, GIC, which halved its stake in Citigroup in September, cashing in on a market rally for a profit of $1.6 billion.
The situation in the United States was better than before, and so investors could “pull back their money,” said Naser al-Nafisi, general manager for Al Joman Center for Economic Consultancy in Kuwait.
Citigroup’s stock, which fell as low as 97 cents in March, has since more than quadrupled, and it may be slowly regaining favor among investors.
In a November regulatory filing, hedge fund billionaire John Paulson’s firm revealed that it had taken a stake in Citigroup. Paulson & Co had bet that financial services companies would tumble last year.
Still, some investors may not be as lucky. Common shares of Citigroup, which has posted more than $100 billion of write-downs and consumer credit losses since the credit crisis began, have lost about 85 percent of their value since the KIA investment in January 2008.
Abu Dhabi Investment Authority invested $7.5 billion in Citigroup through bonds that it must start converting in March 2010. In the original deal with ADIA, the Citigroup securities must be converted into common stock at a price between $31.83 and $37.24 a share between March 2010 and September 2011.
Saudi-based Kingdom Holding , controlled by billionaire Prince Alwaleed bin Talal, is also a large Citigroup shareholder.