China’s sovereign wealth giant seeks overseas investments

RenminbiChina Investment Corporation (CIC), a sovereign wealth fund responsible for managing the country’s foreign exchange reserves, has vowed to diversify its portfolio. Interest in overseas investment has been on the rise in China, particularly since it became clear that the renminbi is no longer a one-way bet on appreciation. Last year, CIC’s assets grew to $652 billion (€486.9 billion) from $575 billion and the fund achieved a 9.33% return, according to a fund report published last Friday. Shanghai-based consultancy Z-Ben Advisors says the move to international investment will see CIC likely putting managers under scrutiny. “Already an area of intense competition, with slight performance edges and blood-letting fee cuts dictating success, participating asset managers and would-be competitors will be disappointed to learn that, in our view, CIC is going to become even more picky (and even more stingy) when reviewing current and future partners,” the consultancy writes in a market note. “It gets worse: funding and cash levels detailed in Friday’s report suggest that CIC is planning to rotate through asset classes (and managers) more flexibly and frequently than ever before.” With a stated ambition to grow into a “respected, world-class sovereign wealth fund”, CIC says it has been engaging in international exchanges and cooperation. Last year, its executives visited numerous countries and regions, and received more than 200 visiting delegations with a large number of government officials and executives from investment institutions. “With these interactions, we strengthened communication with governments, business entities and all other stakeholders to demonstrate our policies and practices as a long-term financial investor making responsible investments based on market rules,” CIC says. The fund also says that it endeavoured to mitigate the negative impact of investment protectionism and foster an open, fair and non-discriminatory environment for international investment. The asset allocation decisions of sovereign wealth funds, like CIC, are closely watched among institutional investors in China, which tend to follow their decisions. Ping An of China Asset Management (Hong Kong), which manages the overseas investment of one of China’s largest insurers, recently told Funds Europe’s sister publication Funds Global Asia that it was exploring new overseas investment opportunities. ©2014 funds europe

Executive Interviews

INTERVIEW: Put your money where your mouth is

Jun 10, 2016

At Kempen Capital Management, they believe portfolio managers should invest in their own funds. David Stevenson talks to Lars Dijkstra, CIO of the €42 billion manager.

EXECUTIVE INTERVIEW: ‘Volatility is the name of the game’

May 13, 2016

Axa Investment Managers chief executive officer, Andrea Rossi, talks to David Stevenson about bringing all his firm’s subsidiaries under one name and the opportunities that a difficult market...


ROUNDTABLE: Beyond the hype

Oct 13, 2016

The use of smart beta investing continues to grow. Our panel, made up of both providers and users, discusses what the strategy actually means, how it should be used and the kind of pitfalls that may arise when using this innovative investment technique.

MIFID II ROUNDTABLE: Following the direction of travel

Sep 07, 2016

Fund management firms Aberdeen and HSBC Global meet with specialist providers to speak about how the industry is evolving towards MiFID II.