Exclusive | China-Middle East investment opportunities in sights as CIC teams up with Partners Group

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Swiss private equity firm is working with China Investment Corp, other sovereign funds, as investment flows grow between China, Middle East

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Aileen Chuang

Published: 8:30am, 2 Jul 2024Updated: 11:42am, 2 Jul 2024

Swiss private equity firm Partners Group is working with China Investment Corp (CIC) and Middle Eastern sovereign wealth funds to curate growing investment flows as the two regions cosy up.

The Zug-based firm has long-established relationships with CIC, which has assets of US$1.35 trillion, and some of the large Middle Eastern sovereign wealth funds to invest their money globally. These relationships allow the firm to understand the funds’ investment objectives and find opportunities to collaborate between regions and organisations, Kevin Lu, chairman of Asia for Partners Group, said in an interview.

“We see strong and growing economic linkages between the Middle East and Asia today,” Lu said. “As a trusted general partner with a long-term relationship with sovereigns on both sides, curating that investment flow is quite interesting.”

CIC, China’s sovereign wealth fund established to help diversify its foreign-exchange reserves, has shown strong interest in investing in the Middle East, especially after President Xi Jinping’s visit to the region in December 2022. CIC set up a US$1 billion fund earlier this year to invest in companies in the Gulf Cooperation Council (GCC), with the aim of eventually bringing them to the mainland China market.

State-owned investors in Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates – the six GCC nations – invested more than US$2.3 billion in China in 2023, compared with just US$100 million in 2022, according to data provider Global SWF. The oil-producing nations are working to diversify their economies and broaden their portfolios.

Partners Group, which has around US$150 billion of assets under management, is eyeing the opportunities brought by warming ties between the two regions. Its relationship with CIC is part of a China strategy of bringing capital in and out of the country as well as creating value for its global companies with Chinese opportunities, according to Lu.

“We own a lot of companies in the US and Europe, and many of them have an angle on China, one way or the other,” Lu said. “They believe they could manufacture better, improve their supply chain or broaden their market in China. For us, China is as essential as ever because China is not just about investing in China. It’s about all the other things.”