Chief of China's wealth fund bullish on US private sector

China fund sees opportunities in infrastructure after private sector recovery in the US, Europe

PUBLISHED : Tuesday, 14 January, 2014, 1:41am
UPDATED : Tuesday, 14 January, 2014, 1:41am

China's sovereign wealth investment fund is poised to launch a buying spree in global infrastructure projects and advanced technology companies after deleveraging in the US and European private sectors has run its course, its chief said.

However, Ding Xuedong, chairman and chief executive of the US$575 billion China Investment Corporation, cautioned that the outlook for US investments could be clouded by the tapering activity of the US Federal Reserve.

Unlike the debt-laden US government, America's private sector has been resilient in withstanding the global financial crisis five years ago and the ensuing recession.

We plan to take a range of investments including private [and] direct

Now, it is set to undergo a stage where its growth will overtake the emerging markets, Ding said yesterday during a forum held in Hong Kong. He added that Europe has a lot of potential given its more positive outlook.

The top official's positive statements on the US private sector market come at a time when the investment firm is rumoured to be moving its North America headquarters to New York from Toronto, where the fund set up its overseas office in order to make strategic investments primarily in Canada's energy and resource sectors.

"US companies in the areas of shale gas, manufacturing, and advanced technology are within our investment radar," said Ding, who took over at the sovereign wealth fund in July last year. "We plan to take a range of investments including private, direct, and alternative."

The Beijing-based investment firm posted a net income of US$77.4 billion in 2012, with a return of 10.6 per cent on the back of a broad-based surge in global equities. Its overseas investments posted a 4.3 per cent return, reversing the loss it had posted in 2011.

US stocks represented 49.2 per cent of CIC's diversified equity investments in 2012, while stocks from non-US advanced economies accounted for 27.8 per cent, and emerging market stocks made up the remainder, according to its annual report.

"In Europe, we favour making investments in infrastructure, small and medium enterprises and properties," said Ding, who said ageing infrastructure in both the US and Europe is in need of fresh capital.