Skip to comments.China forex watchdog burnt by WaMu collapse
Posted on 12/31/2008 4:28:10 AM PST by TigerLikesRooster
China forex watchdog burnt by WaMu collapse
Tue Dec 30, 2008 11:08am GMT
By George Chen, Asia Private Equity Correspondent
HONG KONG (Reuters) - China's foreign exchange watchdog, the State Administration of Foreign Exchange, will cut back on overseas equity buys next year after suffering major losses on the collapse of U.S. lender Washington Mutual, according to sources.
Earlier this year, SAFE, which controls around $2 trillion of China's foreign reserves, agreed to invest up to $2.5 billion in fund of U.S. private equity giant TPG TPG.UL -- its first foray into a foreign private equity fund, people close to the situation told Reuters.
In April, TPG, one of the world's largest private equity firms, led a $7 billion investment in Washington Mutual to help the troubled lender boost its capital.
TPG put money into WaMu through several of its funds, including one SAFE invested in, said the sources who declined to be identified due to the sensitive nature of the deal.
Just five months later, WaMu, the largest U.S. savings and loan firm, was closed by the U.S. government, making it one of the largest U.S. bank failures in history.
(Excerpt) Read more at uk.reuters.com ...
Its banking assets were sold to Wall Street bank JPMorgan (JPM.N) for $1.9 billion, wiping out about $1.35 billion that TPG and its institutional investors, known as "Limited Partners" had invested.
"At that time, SAFE was certainly shocked by the news that the U.S. government decided to take over WaMu and there was almost nothing that SAFE could do to save its investment," said one of the sources. "It's a good lesson for SAFE and you can imagine how unhappy it was, just like every other LP of TPG for the deal," he said.
Welcome to the world of nationalization...
I have no problem thinking that some (or most of) that "secret" two trillion dollars that news organizations are trying to uncover via the courts went to China, et al to reimburse them for all their loses and then some.
One minute the Clown Congress and President are telling everybody to buy houses, then they are saying they are going to ‘rescue’ mortgages, then the next week Clown Paulson decides not to.
Clowns to the left of me, (Fwank, Dodd, Reid)
Clowns to the right of me, (Bush,Paulson)