Aabar Bets on UniCredit

Continental European financial institutions are in dire need of capital due to regulations, a frigid regional credit market environment, and the conditions of their balance sheets. Institutional money managers are watching who will step in first to invest in these upcoming rights issues. In 2007 and 2008 sovereign wealth funds mostly from Asia and the Middle East participated in the bailout of several prominent Western financial institutions. Some SWFs made money, some lost.

Middle Eastern sovereign investors are carefully allocating capital to select European banks. Italy’s UniCredit S.p.A’s €7.5 billion rights issue was off to a sluggish start.

Aabar Luxembourg Sarl, a subsidiary of Aabar Investments plans to raise its stake in Italy’s UniCredit S.p.A to 6.5% once the bank’s capital raise is completed. Aabar Investments is owned by Abu Dhabi’s International Petroleum Investment Company (IPIC). Aabar Investments has a history of investing in UniCredit S.p.A.

The Central Bank of Libya and the Libyan Investment Authority are also shareholders in the bank.

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