CIC sets stringent standards

PUBLISHED : Friday, 14 December, 2007, 12:00am
UPDATED : Friday, 14 December, 2007, 12:00am

The country's sovereign wealth fund yesterday unveiled stringent requirements for overseas firms seeking to manage part of its assets in the global equity markets, showing Beijing's hope in shoring up returns after a setback in the fund's first investment.

China Investment Corp said overseas fund managers would not be qualified to bid for mandates unless their annual performance outperformed the MSCI All Country Index by 300 basis points.

Investment firms must also have reported annual returns of 200 basis points higher than the MSCI EAFE Index or 300 basis points higher than the MSCI Emerging Markets Index, the newly established US$200 billion sovereign wealth fund said.

Jing Ulrich, JP Morgan's chairman for China equities, said: 'The criteria they have set forth appear reasonable. It appears CIC is seeking to build broadly diversified global portfolios.'

Analysts said CIC, led by chairman Lou Jiwei, was under pressure to increase the value of the foreign exchange assets after a loss in the investment into buyout fund Blackstone Group.