$1.1bn haul as Kuwait dumps Citi

Kuwait&rsquo;s sovereign wealth fund made a $1.1bn (&pound;669.5m) profit when it sold its stake in Citigroup yesterday, becoming the latest Gulf investor to offload foreign investments as markets improve.<br /><br />The Kuwait Investment Authority transferred the preferred shares it owned in Citigroup into common stock and sold the entire holding for $4.1bn. It had invested $3bn in the American investment bank in January 2008, when it also pumped $2bn into Merrill Lynch (which has since been bought by Bank of America).<br /><br />The move comes after Kuwait&rsquo;s sovereign wealth fund, which manages state assets, drew sharp criticism from some parliamentarians for its investments in the US banks. <br /><br />During the financial crisis sovereign wealth funds from China and the Middle East stepped in to shore up the capital position of many cash-strapped US and UK banks, but are now trying to extricate themselves from their investments. Barclays avoided a government bailout partly by selling larges stakes to the Qatar and Abu Dhabi sovereign wealth funds. The Abu Dhabi investors made a &pound;1.46bn profit when they sold most of their &pound;2bn stake in June.<br /><br />Saudi Arabia&rsquo;s Prince Alwaleed bin Talal remains a shareholder in Citigroup, despite an 88 per cent drop in the bank&rsquo;s share price during the past two years.