China SWF makes more direct investments

Chinese lanternsChina’s National Council for Social Security Fund (NCSSF) made more direct investments in 2010 than the year before, with 58.9% of its RMB776.7bn (€83.7bn) in assets under management representing direct holdings.

The fund’s annual report revealed that of the 2010 AuM, mandated investments accounted for 41.1%. This was lower than the 46.6% registered in 2009. This meant that around RMB497.8bn consisted of assets the fund held on its own account.

In an analysis of the fund’s annual report, consultancy firm Z-Ben Advisors said that the fund also shifted some of its existing mandates. “It appears to be much more comfortable with volatility than has historically been the case,” the firm claimed.

Furthermore, Z-Ben noted that although the headline mandate number actually decreased in 2010, the NCSSF’s total mandate figure from the report does not include recently released domestic awards, which total approximately RMB10bn so far in 2011.

Z-Ben said: “An increasing portion of these mandates consist of higher-risk equity allocations, whereas the directly invested portion of their portfolio is held in more conservative assets, or alternative allocations.

“In total, there are at least 16 FMCs [fund management companies] and two securities firms that have been appointed to manage domestic investments for NCSSF.”

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