China Investment Corporation

China’s sovereign wealth fund reverses investment loss in 2016

Net return for outbound investment rebounded to 6.22 per cent

PUBLISHED : Tuesday, 11 July, 2017, 7:54pm
UPDATED : Tuesday, 11 July, 2017, 7:54pm

China’s sovereign fund China International Corporation (CIC) achieved a 6.22 per cent net return on outbound investment in 2016, reversing the 2.96-per cent loss recorded for 2015, its annual report issued on Tuesday showed.

With total asset value surpassing US$813.5 billion according to the report, CIC has become the world’s second largest sovereign wealth fund, after Norway’s $960 billion sovereign fund.

Net profit rose to US$75.3 billion in 2016 from US$73.9 billion a year earlier. Its accumulated annualised investment return since its establishment in 2007 stood at 4.76 per cent by 2016, the annual report said.

The increase in investment return was bolstered by portfolio adjustment and high returns on stock markets in Europe and the United states, Li Wenping, managing director of CIC’s financial department, told a news conference.

The firm said it would seek to increase direct investment in the US with its newly-established New York office, including investments in the infrastructure and property sectors, Reuters reported.

Chinese sovereign wealth fund CIC to raise overseas investment

More than 45.99 per cent of the offshore portfolio was made up by equity investment, while 15 per cent went to fixed income investment, 37.2 per cent went to alternative investment, and the remaining 1.9 per cent was in cash products, the annual report said.

CIC invested overseas through two subsidiaries, CIC International Co and a direct investment vehicle, CIC Capital Corp.

CIC Capital, launched in 2015, signed 16 deals worth about US$5 billion last year, the report said.