September 29, 2008
Department of Crisis Irony
Posted by Anna Gelpern

The folks at the Glom kindly scheduled this guest blog to coincide with the release of the IMF-brokered code of conduct for sovereign wealth funds, due out in early October.  Who knew we would be in the middle of the Greatest Crisis since the Great Depression.  With the Paulson package defeated and oblivion upon us, it seems appropriate to start with a long view on sovereign wealth and crises:

Earlier this month, the FT reported that KAMCO, Korea’s state-owned asset management company, is looking to buy just under a billion dollars’ worth of distressed U.S. assets.  Ten years ago, KAMCO was reorganized in the wake of the Asian Financial Crisis to take bad loans off the books of Korean banks.  At the time, there was huge opposition to selling assets to foreign investors at fire-sale prices.  KAMCO more or less finished cleaning up at home by 2003, and began developing its international asset management and advisory business.  Now it is time to go shopping.  Assuming some version of an AMC will come out of the U.S. Congress before the world ends, at least we have something to look forward to in a few years.  FWIW, Badbank Harmony (KAMCO’s consumer arm) is a fetching name.

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