China's sovereign wealth fund to boost stake in Germany
Private equity funds with ties to China market look very attractive to Beijing, top official says
China's sovereign wealth fund is eyeing greater investment in Germany to strengthen its foothold in the manufacturing powerhouse, the fund's deputy chief has said.
Li Keping , vice-chairman of China Investment Corporation, said the more than US$7 billion it had put into Germany was a key part of its global holdings portfolio. Much of the money flowed through the open market in the form of equities and bonds, Li told a business forum at the German embassy in Beijing on Wednesday.
CIC expected to keep those levels largely stable but saw significant room to expand investments in cooperation with private equity funds in Germany, in addition to increasing direct investment. It had partnered with more than 10 private equity funds with a focus on Europe which had given CIC "quite big exposure" to Germany, Li said, adding a wide range of businesses and industries were covered.
Among CIC's targets were funds tied to the Chinese market. "As a Chinese sovereign wealth fund, we will meet partners who are interested in China's economy and hope to share the growth outlook with Chinese enterprises," Li said.
"There is room for cooperation to meet the consumption demand of the rising middle class and meet higher requirements in environmental protection and quality."
The fund established CIC Capital earlier this year to conduct direct investment overseas and wanted input from Chinese and overseas partners on what the new group should target.
CIC Capital completed an acquisition of a minority interest in Autobahn Tank & Rast, Germany's largest provider of petrol stations, in a joint deal with Allianz Capital Partners, Munich Re Group and other sovereign wealth funds.
German ambassador to China Michael Clauss said at the forum that the stability of his country's political system and its economic resilience was an attraction for China's investors and he expected CIC to increase its investment in Germany.
Li, who replaced Gao Xiqing as the fund's No. 2 in February last year, added that China would not see double-digit growth in its economy, given overcapacity in manufacturing and the downturn in traditional areas of growth, but he predicted the nation would see new business potential, without elaborating.
According to CIC, its total assets last year exceeded US$740 billion although it did not provide a breakdown of how much was tied up in overseas holdings.
