The News Journal- When the Abu Dhabi government announced late in November that it was buying 4.9 percent of Citigroup for $7.5 billion, the general reaction was relief that the firm was finding a way out of the subprime mortgage mess.
The same response followed the early December news that UBS was selling a 10.8-percent share to the government of Singapore and an unnamed Middle Eastern investor for $11.5 billion, for much the same reason.
But is foreign ownership — or, more precisely, foreign government ownership — really a good thing? Many experts think this mushrooming trend bears watching, especially for any sign that these funds are evolving from pure investment vehicles into tools for exerting political pressure on the “target” countries. “I think pressure is a legitimate worry, but I’m not sure we have seen signs of that yet,” says Wharton finance professor Franklin Allen.
