GIC admits it fucked up?!
A Singapore sovereign wealth fund that bought large stakes in
banks UBS AG and Citigroup Inc. warned Tuesday that the worst of
the U.S. financial crisis may not be over even if Washington
implements a US$700 billion bailout plan.
The Government of Singapore Investment Corporation, or GIC, said
the current turmoil in the U.S. banking system will likely
undermine the future earnings of the fund, which manages more than
US$100 billion.
"The proposal put forth by the U.S. Treasury should stabilize
the markets to some extent," said GIC Deputy Chairman and Executive
Director Tony Tan at a news conference. "But we should not assume
the worst is over. Financial markets and the economic situation
have deteriorated significantly in the last five months."
GIC also regretted the timing of its
investment in the two banks — US$9.75 billion in UBS in December
and US$6.9 billion in Citigroup in January — said Chief Investment
Officer Ng Kok Song.
"We would have liked the timing of the investments to be
better," Ng said. "But these are long-term investments."
"We were surprised by the onset and magnitude of the market
turmoil starting in July 2007," Ng said in a statement. "What
seemed like a contained problem of delinquencies in U.S. sub-prime
mortgages quickly spread to other segments of the
credit markets."
GIC, which began investing Singapore's reserves in 1981, said
its annual profit for the last 20 years averaged 7.8 percent in
U.S. dollar terms. Tan refused to say what the fund's earnings were
last year or specify how much it manages.
"Given the present challenging conditions and the problems in
the world economy, it is unrealistic to expect that we will achieve
such high returns going forward as in the past," Tan said.
Singapore's other sovereign wealth fund, Temasek Holdings, said
last month that earnings doubled to US$12.8 billion in its fiscal
year ending March 31, bringing total assets to
US$131 billion.
GIC said it invests 44 percent of its portfolio in public
equities, 26 percent in bonds and 10 percent in real estate. It
invests 35 percent in Europe, 34 percent in the U.S. and 23 percent
in Asia.
Former Prime Minister Lee Kuan Yew is GIC's chairman and his
son, current Prime Minister Lee Hsien Loong, is a
deputy chairman.
oh..oh...there goes my money...tomorrow must withdraw my govt
bonds