KIC Chief: Merrill Lynch Investment Was a Painful Mistake
During the global financial crisis, beleaguered U.S. banks begged for private bailouts, trying to avoid U.S. government money. In 2008, the Korea Investment Corporation (KIC) invested US$ 2 billion in Merrill Lynch. Merrill Lynch issued US$ 6.6 billion in preferred stock to the Korea Investment Corporation, Kuwait Investment Authority and Mizuho Financial Group Inc. Eventually, Merrill Lynch merged with Bank of America.
At the time, the KIC decided to invest in Merrill Lynch because of the firm’s reputation and prospective for long-term capital gains. The Korean sovereign fund sustained US$ 720 million in losses from investment at the end of October.
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