Jan. 15 (Bloomberg) -- Billionaire Saudi Prince Alwaleed bin Talal increased his stake in Citigroup Inc. to the ``maximum he could'' without triggering a U.S. regulatory review, investment adviser P.J. Shoucair said today.

``The fresh capital signals the Prince's continued support of Citi and confidence in its future,'' Shoucair said in a phone interview from Riyadh after New York-based Citigroup said it will receive $14.5 billion from outside investors to shore up capital.

Riyadh-based Kingdom Holding Co., 95 percent-owned by Alwaleed, holds 3.6 percent of Citigroup, the Prince's personal office said in an e-mailed statement today. Alwaleed used personal funds to invest while remaining ``below the 4.9 percent ownership threshold'' of direct and indirect holdings, the statement said without being more specific.

Citigroup today posted a $9.83 billion fourth-quarter loss, the biggest in its 196-year history, as surging defaults on home loans forced it to write down the value of subprime-mortgage investments by $18 billion. Writedowns caused him to lose faith in former Chief Executive Officer Charles O. ``Chuck'' Prince, Alwaleed said in an interview with Fortune magazine last year.

The bank ousted the CEO in early November and promoted trading and investment banking chief Vikram Pandit to the top job. In the same month, the sovereign wealth fund of Abu Dhabi, which shares a border with Saudi Arabia, agreed to provide Citigroup with a $7.5 billion capital injection that gave the Gulf emirate a 4.9 percent holding.

Biggest Individual Investor

Alwaleed has been Citigroup's biggest individual shareholder since 1991, when soured investments in commercial real estate left corporate predecessor Citicorp short of capital. Then-CEO John Reed sold Alwaleed $590 million of convertible preferred stock, and the Saudi billionaire stuck with the investment following Citicorp's merger in 1998 with Travelers Group Inc.

Even though it had first rights on the new Citigroup securities, an additional investment by Kingdom Holding ``was not timely given our asset allocation model,'' Shoucair said today. Alwaleed therefore decided to invest by himself, Shoucair said.

By keeping his holdings below 5 percent, Alwaleed avoids a review of the transaction by U.S. banking regulators under the Bank Holding Company Act.

The Prince isn't immediately available for comment today, as he's meeting Saudi Arabia's King Abdullah, his uncle, press aide Heba Fatani, said in a phone interview from Riyadh.

To contact the reporter on this story: Will McSheehy in Dubai at wmcsheehy@bloomberg.net

Last Updated: January 15, 2008 09:34 EST