Out of Davos, Word That GIC to Hold Citi, UBS Stakes for Long-Term

(January 31, 2011) — The Government of Singapore Investment Corp, the biggest investor in Citigroup Inc. and UBS AG with a total of more than $200 billion in assets under management, told Bloomberg that it plans to hold on to its stakes in the banks for “many years.”

In a January 29 interview at Davos, Switzerland, where he attended the World Economic Forum meeting, Tony Tan, deputy chairman of the Singapore sovereign wealth fund, said the fund will only consider selling if there are attractive offers. “But one never says never; if someone offers an extremely high price, of course we’ll look at the possibility,” he said. GIC purchased stakes in Citi and UBS during the financial crisis and since then it has sold about 50% its stake in the US lender.

Speaking on The Future of Investing panel at Davos, Tan said that with the rise of emerging economies and their infrastructure and investment needs, long-term capital will be in greater demand, with the US remaining GIC’s biggest area for investments, The Business Times reported. Tan also encouraged policymakers to avoid blanket regulations that would deter long-term investors, noting that even though the economy has rebounded, other economic, political and market risks — namely the eurozone debt crisis, potential asset price bubbles in Asia, sovereign debt risks in the US — remain high.

Late last year, the GIC reported that it had recovered most of its losses caused by the 2008 financial crisis, and has said it will focus increasingly on emerging markets as they trump developed economies. “…We expect high growth in the emerging economies to continue, with expanding domestic demand offsetting slower growth in export demand,” group chief investment officer Ng Kok Song said in GIC’s annual report.