Sheik scores big payday on Barclays

Posted Jun 2nd 2009 2:00PM by Tom Taulli
Filed under: Barclays plc ADS (BCS)

A year ago, a variety of sovereign wealth funds pumped billions into financial institutions. While the results have been mixed, there are still some clear winners.

An example is the £7 billion investment in Barclays PLC (NYSE: BCS) last October, so as to stave off a takeover from the UK authorities. One of the investors included PCP Gulf Invest 1 Ltd., which is part of the sprawling empire of Sheikh Mansour bin Zayed Al Nahyan.

Well, he has decided to unload about 1.3 billion shares, which will translate into a near doubling of the original investment (this is according to the Wall Street Journal, a paid publication). Yes, in light of the large amounts, it's a stunning investment.

In fact, the fund will still have about a £1.5 billion stake in Barclays. There is also a warrant to purchase 700 million shares, which could mean even more upside over time.

Yet, the fact that Sheikh Mansour has dumped a large amount of shares is a telling sign. That is, the sentiment might be that the big gains are over for the time being. Besides, as seen with some of the recent moves from other sovereign wealth funds -- such as Temasek Holdings Pte -- there appears to be a move away from financials.

In today's trading, Barclays' shares are down 11% to $18.15.

Tom Taulli is the author of various books, including The Complete M&A Handbook and the founder of BizEquity, a free online business valuation tool for small businesses.

Tags: BCS, inthenews, sovereignwealthfunds