Singapore fund is $1.5B bidder for Paulson hotel group
August 22nd, 2012
Author: Online Press
Aug 20 (Reuters) – The Government of Singapore Investment Corp has bid $1.5 billion for a group of bankrupt hotels owned by hedge fund Paulson & Co, including the Arizona Biltmore Resort & Spa in Phoenix and La Quinta Resort & Club in La Quinta, California….
This seems to be the strategy of our SWF, throwing good money after bad money for high risk and high returns. On the other hand other funds are buying into Sin into good and sound companies like energy, power and the latest, a national icon in F&N.
If, I say if, the source of the funds is from the people’s savings like CPF, money that cannot lose, is this strategy a bit risky and incompatible to the risk profile of the owner of the fund? What if the strategy fails and unacceptable capital is lost and the fund owners cannot be repaid?
If the gamble turns out good, no one is complaining. If the gamble sours, who is to be responsible? This is not enough as the money must be paid. Do the owners agree or give their permission to using good money to take high risk?