CIC buys 25% stake in South Africa’s Shanduka Group

Shanduka is led by former South African politician Cyril Ramaphosa (pictured), who founded the National Union of Mineworkers, the country's biggest labor union, in the late 1980s, Bloomberg reported. It has interests across a range of sectors, notably coal and the McDonald's Corp. franchises.

Shanduka and CIC were advised by Standard Bank and Standard Chartered, respectively.

The deal is another indication of China's commitment to Africa. State-owned enterprises, supported by Chinese policy banks, have invested considerable sums into commodities interests throughout the content, often agreeing to build the infrastructure required to get the resources to port.

South Africa, which boasts the continent's most developed corporate sector, represents a somewhat different opportunity. In 2008, Industrial and Commercial Bank of China bought a 20% stake in Standard Bank Group, Africa's largest lender, for ZAR36.7 billion. Yet the country's precious metals industry has also been a popular target, with Jinchuan Group and China-Africa Development Fund acquiring 45% of Wesizwe Platinum for $877 million earlier this year, while CITIC Group took over Gold One International earlier this month in a $469 million deal.

CIC's interest in Shanduka could be seen as part of wider efforts to diversify the geographical and sector distribution of its holdings. The fund remains most committed to North America, which accounted for 41.9% of its investments at the end of 2010. Asia Pacific follows on 29.8%, then Europe on 21.7%, with Latin America and Africa in single digits.

Over the course of 2010, CIC's exposure to alternative investments - such as private equity, hedge funds, real estate, energy and infrastructure - increased sharply to 21% from 6%. Last month it announced plans to invest in infrastructure in developed countries, starting with the UK.

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• Topics
• Greater China
• MENA
• Expansion
• China
• CIC
• Africa
• Sovereign wealth fund
• energy