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Singapore sovereign fund GIC pares UBS stake at a loss

Reuters  |  ZURICH 

ZURICH (Reuters) - sovereign wealth fund Private Limited, which invested in to support it during the 2008/09 global financial crisis, said it has cut its stake in the Swiss at a loss, partly because of changes in the lender's strategy and business.

GIC, which manages more than $100 billion globally, said it has reduced its stake to 2.7 percent from 5.1 percent.

"made the sale despite the loss because conditions have changed fundamentally since invested in in February 2008, as have UBS' strategy and business," Lim Chow Kiat, chief executive of GIC, said in a statement issued on Monday.

"It makes sense now for to reduce its ownership of and to redeploy these resources elsewhere," he said.

The fund said, however, that its investment in U.S. Citigroup Inc , also made at the height of the global financial crisis, was in the black and that combined returns for and Citi were positive in "mark-to-market terms."

measures its performance on an overall portfolio basis, based on long term rather than annual returns.

is keeping its profitable investment in Citi.

"We remain a shareholder of Citibank. As with all our investments, we continue to manage our position based on our assessment of the fair value of Citigroup and other investment opportunities," a spokeswoman said in an email to on Tuesday.

The sovereign fund had reduced its stake in Citi to under 5 percent in 2009 from over 9 percent but didn't disclose subsequent holdings.

data on Monday showed was not listed as among the top 50 Citi shareholders

UBS, the world's biggest wealth manager, said separately on Monday intended to place up to 93 million existing shares in Group through a sale to institutional investors.

Shares of the Swiss closed 1.3 percent lower at 16.61 Swiss francs after the news, which unusually came during trading hours.

At the closing price, 93 million shares would be worth 1.54 billion Swiss francs ($1.55 billion).

GIC, owned by the government of Singapore, was one of the first sovereign funds to pump billions into Western banks, which were rocked by the financial crisis and suffered deep losses.

took a 9 percent stake in in 2007 via an emergency capital injection when unveiled $10 billion worth of subprime writedowns. said at that time that would invest 11 billion francs.

The sovereign fund converted its 11 billion franc investment in notes into shares in 2010.

Lee Kuan Yew, Singapore's first prime minister, who ruled the city-state for three decades and was formerly the chairman of GIC, said in 2009 that the sovereign fund had invested "too early" in global banks such as Citigroup and Lee died in 2015.

UBS's website listing of major shareholders said that as the owner of had held a stake of 7.07 percent as of December 2014.

Private Limited and its associates have agreed to a 90-day lockup period for the remaining shares, said.

Investment is acting as placement agent on the sale.

(Reporting by Michael Shields in Zurich and Koh Gui Qing in New York; Additional reporting by Anshuman Daga in Singapore; Editing by Steve Orlofsky & Simon Cameron-Moore)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

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