Tuesday, January 22, 2008

Look who's bailing out Wall Street

Scramble for cash
Devastated by tightening credit markets and the mortgage mess, Wall Street firms have sent out an S.O.S. Their cries have been answered in large part by overseas investors, which have agreed to inject billions of dollars into America's biggest banks.The rescue effort has been led by investment funds run by foreign governments, also known as sovereign wealth funds, which have forged a string of deals in recent months.With the U.S. economy limping along, expect more deals. Follow these panels to track the money trail.

Citigroup
The financial giant has raised about $20 billion since November, mostly from sovereign wealth funds. Citi also plans to raise an additional $2 billion through the public sale of preferred securities.Who's buying: The Abu Dhabi Investment Authority, the world's largest sovereign wealth fund; the Government of Singapore Investment Corp., which manages Singapore's reserves; Saudi Prince Alwaleed bin Talal.
Merrill Lynch
Under new CEO John Thain, the company has raised $12.8 billion from a long list of investors based primarily in Asia and the Middle East.Who's buying: Sovereign wealth funds like Singapore's Temasek Holdings, Korea Investment Corp., and the Kuwait Investment Authority; Mizuho Corporate Bank, the investment banking unit of Japanese financial giant Mizuho Financial Group.

Morgan Stanley

While the brokerage hasn't suffered as deeply as Citi and Merrill, it has still found it necessary to shore up its capital base. The company received a $5 billion infusion late last year.Who's buying: The state-run China Investment Corp., which grabbed headlines when it took a stake in private equity titan Blackstone Group last summer.

Bear Stearns
The brokerage struck a deal with a Chinese investment bank last October, with the two firms agreeing to invest $1 billion in each other.Who's buying: Citic Securities Co., one of China's largest state-run banks which made a dual listing in Hong Kong and Shanghai last year.

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