Sovereign funds learn PR lesson

The sovereign wealth management firms that are playing an increasingly important role in the global financial system have steep learning curves to climb in the ways of public relations, as well as in their dealings with politicians and bankers (similar to that experienced by their private equity brethren).

When Sameer Al-Ansari, CEO of Dubai International Capital, remarked at a conference last week that Citi was likely to need much more capital than the US$30bn it has already raised, he may have been simply musing out loud, or having a dig at his neighbours in Abu Dhabi, who joined the initial Citi capital infusion. But after a collapse in Citi’s share price and some frantic behind-the-scenes lobbying, Al-Ansari’s minions made a deeply unconvincing retraction on his behalf. “Dubai International Capital has never expressed an opinion on the investment merits or financial condition of Citi. Further, we have not been privy to any non-public information about the company, neither has Citi approached Dubai International Capital for a capital raise. Dubai International Capital maintains an ongoing relationship with Citi and has substantial respect for the company,” a statement said. Sadly this retraction was not enough to prompt a recovery in Citi’s stock, which closed the week firmly down. Disappointment that Al-Ansari had not been talking down Citi’s stock prior to making an investment of his own may have contributed to the failure of the statement to make up for the harm it caused.Of course, growing indications that the US is in a recession and the global financial markets are seizing up again probably had more of an effect, but Al-Ansari will probably keep his thoughts to himself next time.