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China economy
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China’s US$941 billion sovereign fund seeks more resilient assets to improve on 17 per cent gain in 2019

  • China Investment Corp achieved 17 per cent unaudited gain from overseas investments in 2019, after a loss in 2018
  • Fund added US investment-grade loans, health care and IT stocks, and raised exposure in Asia in recent months

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Delegates attend the opening ceremony of China Investment Corp’s New York representative office and an investment seminar in New York in 2017. The sovereign wealth fund earned 17 per cent from its overseas investments in 2019. Photo: Xinhua
Bloomberg
China Investment Corp (CIC) is looking for more resilient assets in markets battered by the coronavirus pandemic as the nation’s US$941 billion sovereign wealth fund seeks to boost long-term returns, Executive Vice President Zhao Haiying said.
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The company added to its investments in credit markets in recent months, especially investment-grade loans in the US, after the Federal Reserve eased a liquidity crunch, Zhao said in an interview on Saturday. It added health care and information technology stocks and raised exposure in regions like Asia where there was “less uncertainty” about the spread of the virus, she said.

Its overseas investments returned about 17 per cent last year based on unaudited results, she said, as global stocks rallied. That comes close to a record 17.6 per cent gain in 2017 and reverses a loss in 2018 when equities tumbled.

Beijing-based CIC is fine-tuning its investment strategies. It sees a diversified portfolio as the best way to weather its biggest test since inception in 2007. A plan to boost alternative and direct investments to 50 per cent of global assets by the end of 2022 remains unchanged, with the private portfolio, which includes real estate and private equity, avoiding any “serious damage” even as cash flows slow, Zhao said.

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“As a long-term investor, we want to invest in growth,” Zhao said in Beijing. “Given the many external shocks, you need to be more focused on the more resilient areas, strategies and themes, and avoid fragile areas.”

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