Singapore’s sovereign fund GIC Pte has decided to reduce stake in UBS. GIC reduced its ownership of UBS from 5.1 per cent to 2.7 per cent on May 15 as the sale of shares realised a loss on the UBS investment.
GIC in a press release said, “GIC is disappointed that the UBS investment resulted in a loss, but its Citigroup investment has earned a positive return. The combined return on the UBS and Citigroup investments has been positive in mark-to-market terms.”
Pointedly, GIC invested in Switzerland's biggest bank early during the financial crisis, purchasing debt that converted into stock when UBS needed capital to cover losses on subprime mortgage bonds. In 2010, the Singapore wealth fund became the bank's largest investor after the securities were converted into stock. UBS has since given up its ambitions to become a top global investment bank, focusing instead on the more predictable business of wealth management.
Mentioning the new investment priorities for GIC, Jeffrey Jaensubhakij, GIC's new chief investment officer, said, “Technology and health care may offer promising investment opportunities over the next decade, as muted global growth weighs on returns from traditional assets.”
Meanwhile, UBS shares fell 1.3 per cent to 16.61 francs (S$23.30) in Zurich, erasing earlier gains. The stock has climbed 4.1 per cent this year, though it's still well below where it traded in December 2007, when GIC first announced its investment.