Monday, January 07, 2008

Asian Investment Spree

One aspect of globalisation, the money is flowing back...

Bloomberg: Sovereign Funds Invest Where Buffett Won't: Michael R. Sesit
In the past two years, sovereign wealth funds and Chinese financial institutions invested at least $77.2 billion in Western banks and money managers. About $66.6 billion of that was placed in the last three quarters of 2007, accelerated by banks' needs for capital infusions after being battered by the subprime- mortgage crisis and related credit crunch.
Bottom line: ``Owning a big American bank is a bit like owning a big American automobile company, or a big American newspaper, or, for that matter, the U.S. dollar,'' Dalio said. ``For all of them, the memory of what it was carries a certain cache that tends to make it trade for more than its real value in the modern world.''

Perhaps the most telling evidence that sovereign funds may be buying pigs in a poke is billionaire Warren Buffett's rebuff to U.S. financial institutions seeking cash infusions. ``So far, we have not seen a deal that causes me to start salivating,'' the chairman of Omaha, Nebraska-based Berkshire Hathaway Inc. said in a Dec. 26 interview on CNBC. Of course, Buffett isn't averse to all banks. Berkshire Hathaway is the biggest shareholder in Wells Fargo & Co. and the second-largest in M&T Bank Corp.

1 comment:

Andrew Marshall said...

We are certainly seeing more asian investment, and especially Chinese investment, in businesses all around the world. With Asia's economies growing there are more wealthy Asians and Asian companies willing and able to invest abroad.