CIC trims financials exposure with partial exit from BlackRock
China Investment Corporation (CIC) has exited most of its holding in asset manager BlackRock as part of a wider effort to reduce its exposure to international financial institutions.
According to the Financial Times, the sovereign wealth fund has been offloading the bulk of its shares in recent months via the public market. CIC paid about $1 billion for just under 3% of BlackRock in 2009, to support the asset manager's acquisition of Barclays Global Investors.
The shares were purchased at a discount to BlackRock's then trading price of $178.50 and, although the stock closed at $176.40 on Friday, it has peaked at $209.40 in the last 12 months, so CIC is understood to have profited from the investment.
The sovereign wealth fund has never publicly disclosed its BlackRock stake, but it is one of a number of financial services holdings, several of which have underperformed. CIC is sitting on large paper losses on its pre-global financial crisis investments in the likes of The Blackstone Group and Morgan Stanley.
CIC doubled its exposure to private equity, direct investments and hedge funds in 2011 but market volatility saw the sovereign fund's global portfolio retract by 4.3%, contributing to its first-ever annual loss. Net income for the year came to $48.4 billion, down 6.1% year-on-year.
There has been a general shift away from financial services and into real assets in recent years, although investments in natural resources companies such as Noble Group have been hit hard by the downturn in commodities prices.
Writing in CIC's 2011 annual report, Chairman and CEO Jiwei Lou cited increased exposure to non-public market assets - direct and private equity investments in areas such as energy, resources, real estate and infrastructure - as an example of how the fund's asset allocation and risk management have evolved to protect against market shocks.
Direct investments highlighted in the report include Canada's Sunshine Oilsands, Thames Water Utilities in the UK, France's GDF Suez, Polyus Gold, AES-VCM Mong Duong Power in Vietnam, Australia's Horizon Roads, South Africa's Shanduka Group, BTG Pactual in Brazil, Atlantic LNG in Trinidad and Tobago and Diamond S Shipping.
More on Greater China
Latest News
Asian GPs slow implementation of ESG policies - survey
Asia-based private equity firms are assigning more dedicated resources to environment, social, and governance (ESG) programmes, but policy changes have slowed in the past 12 months, in part due to concerns raised internally and by LPs, according to a...
Singapore fintech start-up LXA gets $10m seed round
New Enterprise Associates (NEA) has led a USD 10m seed round for Singapore’s LXA, a financial technology start-up launched by a former Asia senior executive at The Blackstone Group.
India's InCred announces $60m round, claims unicorn status
Indian non-bank lender InCred Financial Services said it has received INR 5bn (USD 60m) at a valuation of at least USD 1bn from unnamed investors including “a global private equity fund.”
Insight leads $50m round for Australia's Roller
Insight Partners has led a USD 50m round for Australia’s Roller, a venue management software provider specializing in family fun parks.