CEF Holdings, a venture between Li Ka-shing's flagship company and Canadian Imperial Bank of Commerce (CIBC), is looking to invest in gold mining companies after a slump in prices created buying opportunities.
"Long term, gold is a good place to be," CEF chief executive Warren Gilman said in an interview in Hong Kong. Cheung Kong (Holdings), controlled by Li, Asia's richest man, and CIBC each own 50 per cent of CEF. The venture focuses on investing in resources companies globally.
Bullion is heading for its first annual decline since 2000 and has slumped 27 per cent from a record US$1,921.15 an ounce in September 2011. The plunge prompted investors John Paulson and George Soros to sell gold as mining companies cut jobs and the valuation of their mines.
"I was a little uncomfortable making investment in gold at US$1,700 and US$1,800 an ounce," Gilman said yesterday. "The correction we've had this year from my perspective is great because we can hopefully fulfil that objective of making some gold investments."
CEF recently made debt investments in Uranium Energy and Avanti Mining, which is developing a molybdenum mine in Canada. Gilman declined to comment about CEF's size or cash available for investments.
Gold has fallen 16 per cent this year as the dollar has strengthened and amid concern that the Federal Reserve will begin cutting back its stimulus measures.