Sovereign wealth funds missed an opportunity to expand their foothold in the US financial system when Merrill Lynch last week decided against selling its 49 per cent stake in BlackRock, the fund manager, people familiar with the talks said.

If Merrill Lynch had gone through with the deal, some of its BlackRock shares were likely to have been purchased by Kuwait Investment Authority, these people said. Singapore’s Temasek was also a possible buyer of shares, they added.