China Investment Corporation
Country: China
Established: 2007
US$ Billion: 200
Origin: Non-commodity
Transparency Rating: 1
Summary:
The China Investment Corporation (CIC) is responsible for managing part of China's foreign exchange reserves with around US$ 200 billion of assets under management. It is modeled similar to Singapore's Temasek Holdings.
Background:
The People's Republic of China currently has around US$1.4 trillion in currency reserves. The need to seek greater returns, increase diversification, and hold less in US currency helped prompt the creation of the CIC. Established in September 29, 2007, the fund has made substantial investments in financial firms. The previous vehicle, state-owned Central Huijin Investment Company Limited was merged into the new company as a wholly-owned subsidiary company.
Around $140 billion is invested in helping out some State Owned Enterprises (SOE).
Strategy & Objectives:
CIC tends to use external money managers and participate in indirect equity holdings through various investment funds. Some of the fund money is being used for helping out certain State Owned Enterprises. They are active in pursuing global resources such as in places like Africa and Australia.
Sovereign Wealth Enterprises:
1. Central Huijin Investment Company Limited
Established in December 2003, it was acquired by the China Investment Corporation for around US$ 67 billion around the time the CIC was formed. The State Council wanted to reform and restructure China's major commercial banks, so the Central Huijin Investment Company was created. Its main purpose was to recapitalize and stabilize China’s major state-owned commercial banks. It accomplished this by transferring foreign exchange reserves from State Administration of Foreign Exchange (SAFE) into the state-owned banks.
It also owns the China Jianyin Investment Limited which was the original purchaser of the $3 billion stake in the Blackstone Group. It still owns a very large stake in Bank of China Limited.
News and Updates
7/22/2008
CIC continues to look at banks, courts HSBC
The IHT says, “The Sunday Telegraph said bank chairman Stephen Green had met officials from the China Investment Corporation several times in recent months, discussing among other things the possibility of the fund buying HSBC's shares on the open market.”
read more: International Herald Tribune
6/3/2008
CIC tries to have transparency
According to the Financial Times, "The head of China’s $200bn sovereign wealth fund said on Tuesday the fund was trying hard to adapt to international demands for greater transparency even though this was contrary to the country’s ancient historical traditions.
'Our government has never been transparent for 5,000 years' said Gao Xiqing, president and chief investment officer of China Investment Corporation. 'Now we are told we need to be transparent and we are trying.'"
read more: Financial Times
4/25/2008
CIC raises budget to $90bn
According to the Financial Times, "China’s $200bn sovereign wealth fund now has as much as $90bn to spend on assets abroad, an increase of more than 30%, its president and chief investment officer said on Wednesday. The China Investment Corporation initially had about $66bn for investment offshore but Gao Xiqing said it had changed its allocation after the government reduced the amount needed to restructure some struggling state-owned financial institutions. Gao said most of CIC’s enlarged offshore allocation would go to external managers to invest in equities, fixed income products and alternative investments."
read more: Financial Times
4/10/2008
Total CEO: Chinese sovereign fund, SAFE holds around 1.3 percent
Dow Jones writes that, “Total SA Chief Executive Christophe de Margerie Thursday said the stake taken in the company by a Chinese sovereign fund is around 1.3%.” Is SAFE trying to establish itself as a sovereign investor?
read more: Dow Jones
3/30/2008
CIC in discussion to buy Dresdner Bank
Europe's biggest insurer Allianz SE is holding "intensive" negotiations with Beijing's state-owned China Investment Corporation (CIC) over the possible sale of its banking offshoot Dresdner Bank, the German media reported Thursday. Citing industry sources, the Munich daily Sueddeutsche Zeitung reported that CIC is seeking to acquire both Dresdner's retail business as well as its investment banking operations.
read more: Earth Times
3/6/2008
CIC interested in Swedish government's 19.9% stake in Nordrea
The China Investment Corporation is interested in buying the Swedish government's 19.9 per cent stake in Nordea AB. 'We have come to know that the Swedish state is privatising Sweden's biggest bank and we are going to take a closer look,' said China Investment's Gao Xiqing.
read more: Forbes
3/1/2008
China's Pension Fund
According to Reuters, "Zheng Bingwen of the Chinese Academy of Social Sciences, the government's top think-tank, said China should launch a fund similar to Norway's Government Pension Fund -- Global, which is one of the world's biggest pension funds and invests Norway's oil and gas revenues for future generations.
The existing China National Social Security Fund (NSSF), a "fund of last resort" for China's patchwork of chronically underfunded provincial pension schemes, should also boost its overseas investments with a focus on markets in neighboring countries, he said.
The NSSF had assets of 516.2 billion yuan ($72.53 billion) at the end of last year, including overseas equities investments of $1.66 billion, data released at the forum on Thursday showed."
read more: Reuters
2/24/2008
CIC turns focus on Japan
The China Investment Corporation sovereign announced plans to buy as much as $10 billion in Japanese stocks and may consider purchasing a large stake in oil and gas developer Inpex Holdings Inc.
Initially, the fund will focus on stocks centered in Tokyo and eventually move toward direct investments, such as real estate.
read more: Reuters
2/8/2008
$4 Billion In J.C. Flowers Fund - Investing Indirectly
The CIC plans to invest $4 Billion into the J.C. Flowers Fund, a private equity fund headed by former Goldman Sachs trader, Christopher Flowers. The investment will be aimed at distressed financial institutions.
Location
Beijing, China
Websites
CIC Site
CIC External Managers
State Owned Assets Supervision and Administration Commission of the State Council (SASAC)-English
Major Direct Foreign Investments (Public)
| Company |
Country |
Industry |
% Ownership |
Comments |
| Blackstone Group |
United States |
Financials |
10% |
$3 Billion Purchase |
| Morgan Stanley |
United States |
Financials |
9.9% |
|
| Visa |
United States |
Financials |
|
Around $100 Million from the IPO |
|
Major Direct Foreign Investments (Private)
| Company |
Country |
Type |
% Ownership |
Comments |
| JC Flowers PE Fund |
United States |
PE Fund |
~80% |
$4 Billion US PE Fund |
|
1. All figures quoted are from official sources, or, where the institutions concerned do not issue statistics of their holdings, from other publicly available sources.
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