April 30, 2008 / 5:22 AM / 11 years ago

UPDATE 1-Singapore's GIC may invest in more banks - TV

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SINGAPORE, April 30 (Reuters) - The Government of Singapore Investment Corp may invest in more banks in Europe and the United States if it gets the chance, adding to its stakes in beleaguered bank UBS and Citigroup, its chairman told Bloomberg TV.

“If there are other banks of the quality of the two that we bought into, with the promise and the capabilities and inherent capabilities to recover, we have got the liquidity to meet it, to make such an investment,” GIC Chairman Lee Kuan Yew told Bloomberg TV in an interview broadcast on Wednesday.

“We are buying something that we intend to keep for the next two to three decades and grow with them”, he said, adding that GIC was a long-term investor.

GIC, one of the world’s largest sovereign funds, invested about $11 billion in UBS UBSN.VX and Citigroup (C.N) after they wrote off billions of dollars in the wake of the credit crisis in the United States.

Its sister fund, Temasek Holdings [TEM.UL], which is run by Lee’s daughter-in-law, pumped $5 billion into Merrill Lynch MER.N.

The two Singapore funds have since seen the value of their investments shrink with UBS shares falling about 35 percent since GIC first announced its plan to inject funds into the Swiss bank by buying mandatory convertible notes.

Lee defended the investments saying Singapore had bought very good franchises and brand names that would recover in time.

GIC measured its performance over five to 10 years, he said.

“Will there be another Swiss bank like UBS for wealth management? I doubt it, we doubt it, that is why we invested in it.”

Citigroup, he added, had “an enormous spread worldwide as a retail bank”.

Lee, 84, was independent Singapore’s first prime minister and is the father of Prime Minister Lee Hsien Loong. He still holds a cabinet position in his son’s cabinet.

GIC says on its website www.gic.com.sg that it manages well above $100 billion but many analysts estimate the figure is closer to $300 billion.

Morgan Stanley said in February that GIC was the world’s third-largest state fund with $330 billion in assets under management, behind the Abu Dhabi Investment Authority with $875 billion and Norway’s Government Pension Fund with $380 billion.

Temasek manages $159 billion and is the world’s seventh-largest sovereign fund, according to Morgan Stanley. (Reporting by Kevin Lim; Editing by Jan Dahinten)

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