CIC's international portfolio generates record-high return

CIC increased its alternatives allocation, which includes hedge funds as well as private equity, real estate, infrastructure and resources, from 37.2% to 39.3% over the course of the year. Public equities account for 43.6% of the portfolio, while 15.9% is in fixed income, and 1.2% is in cash.

The sovereign wealth fund said it signed or approved 48 contracts for investments in private equity, real estate and private credit, while partially or fully exiting several direct investments. The size of the private equity program was not disclosed. Last year, CIC said the program, which launched in 2008, had a market value of more than $20 billion and cumulative returns exceeding $10 billion.

The international portfolio is managed by two entities: CIC International, which has a broad asset management remit, including alternatives fund commitments and co-investments; and CIC Capital, which makes direct investments. The latter entity deployed $3.8 billion across 20 projects in 2017. These included a more than $600 million investment in the UK’s largest gas distributor as part of a consortium that took a 61% stake in the business.

CIC’s domestic investments fall under Central Huijin, a holding company established by the People’s Bank of China to manage equity interests in the Big Four state-owned banks. It currently holds shares in 17 financial institutions, including banks, securities companies, insurance companies, and development and policy financial institutions. Capital under management was RMB4.1 trillion ($612 billion) as of year-end 2017.

CIC’s net profit for the year came to $103.6 billion, up from $75.3 billion in 2016. This also represents an all-time high for the sovereign wealth fund, which was established in 2007 with registered capital of $200 billion raised through a government bond issue.

Reviewing activity in 2017, CIC noted that it had continued to professionalize its direct investment platform, optimized its decision-making system for overseas investments, and aligned its investments and services with the One Belt One Road initiative.

“CIC actively sought innovative approaches and facilitated the creation of a trans-border investment platform to leverage our unique advantages in capital, business networks, and Chinese perspective for value creation,” said Guangshao Tu, CIC’s vice chairman and president, in the fund’s annual report. 

Initiatives included the creation of a private equity fund with Goldman Sachs that will invest in the manufacturing, industrial, consumer and healthcare sectors, with a view to supporting the US companies that want to expand into the China market. The vehicle has a target size of $5 billion.

• Tweet  
• Facebook  
• LinkedIn  
• Google plus  
• Save this article  
• Send to  

• Topics
• Greater China
• LPs
• Performance
• China
• CIC
• Sovereign wealth fund