By Jesse Westbrook and Peter Cook

May 1 (Bloomberg) — Kuwait’s $250 billion sovereign wealth fund may boost its stakes in Citigroup Inc. and Merrill Lynch & Co. as it pursues investments in companies battered by subprime- mortgage related losses.

“The valuation in the markets in the U.S. and Europe, we think, has created a lot of opportunities,” Bader al-Saad, the Kuwait Investment Authority’s managing director, said in an interview with Bloomberg Television today. “We have confidence in the management” of Citigroup and Merrill, he said. Shares of both companies rose in New York trading.

The KIA in January bought a $3 billion stake in Citigroup and invested $2 billion in Merrill to help replenish capital at the companies after they suffered writedowns on mortgages, bonds and loans. Banks and securities firms have absorbed more than $300 billion of losses since the collapse of the subprime- mortgage crisis set off a global credit contraction.

Al-Saad said his fund also purchased a 5 percent stake in Related Cos., a closely held residential property developer based in New York. The KIA moved away from pursuing investments in developing nations last year to focus on financial and real estate companies in the U.S. and Europe, al-Saad said.

“This is a temporary shift,” he said. Read the entire article at

http://www.bloomberg.com/apps/news?pid=newsarchive&sid=a6APbY3RZb9g