Mainland state fund buys stake in ANZ

PUBLISHED : Thursday, 20 December, 2007, 12:00am
UPDATED : Thursday, 20 December, 2007, 12:00am

A Chinese state investment fund has acquired a minority stake in Australia and New Zealand Banking Group, raising speculation the mainland's sovereign investment vehicle has resumed its hunt for foreign assets.

ANZ chief executive Michael Smith told bank analysts on Tuesday that a mainland group had taken a small stake in Australia's third-largest lender. He did not name the investor.

ANZ spokesman Paul Edwards declined to deny that the investor was China Investment Corp, the cashed-up national investment agency, despite unconfirmed reports it had not bought the stake.

A small portfolio investment in a resource-rich country such as Australia would suit CIC, which has been criticised at home for losses on its US$3 billion investment in US private equity firm Blackstone Group.

'The investor is a government fund, not a state-owned bank,' Mr Edwards said. 'It is quite a minor stake bought on the share market. If you buy more than 5 per cent, you have to do a regulatory filing.'

Under Australian stock market regulations, an investor holding less than 5 per cent of stock in a publicly traded company does not have to disclose its interests, allowing the mainland fund to remain anonymous.

CIC chairman Lou Jiwei said last month it might be a year before the fund made any major investments overseas.

Other possible investors could include the National Social Security Fund, which is looking for opportunities after instructing fund managers last month to cut its holdings in mainland firms by about 25 per cent.

A spokesman for the national pension fund yesterday said she had not received any information about any investment in ANZ, while Mr Edwards said it 'did not sound like the right fund'.

Another possible name is Tianjin-based Bohai Industrial Investment Fund, a government-backed vehicle that has shown interest in investing in financial services.

Although Bohai Fund is supposed to focus on domestic private equity deals, managers will be familiar with ANZ, which last year paid A$150 million (HK$1 billion) for 20 per cent of Tianjin City Commercial Bank.

Beijing's investment in ANZ is the latest in a string of acquisitions by mainland institutions in foreign banks. China Development Bank paid Euro2.2 billion (HK$24.7 billion) for a 3.1 per cent stake in Barclays in July while Industrial and Commercial Bank of China bought 20 per cent of South Africa's Standard Bank Group for US$5.56 billion in October.