Ailing financial institutions in desperate need of capital have been able to exploit the emergence of sovereign wealth funds looking for higher returns, revealing the competitive dynamic among these giant investors in the process.

The Kuwait Investment Authority had watched its neighbour and peer the Abu Dhabi Investment Authority with envy when it secured an agreement with Citi for its first capital raising. Similarly, the Government of Singapore was a candidate to provide the rescue finance for Morgan Stanley before Morgan Stanley turned to China Investment Corp, according to people familiar with the matter.