Long-term financial returns top priority for CIC, says Gao
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China Investment Corporation (CIC), the nation's $300 billion sovereign wealth fund, is committed to its role as a financial investor and confirmed recent investments in developed countries have not exceeded the 20 percent level in any one company, Gao Xiqing, its president and chief investment officer, said on Friday.
"We aim to be a purely financial investor rather than a strategic investor which makes long-term financial returns the top priority," Gao said at a financial conference held by the Chinese-language Caijing Magazine in Beijing.
The comments follow international concern that the fund's overseas investments were partly driven by a national, strategic agenda focused on controlling global resource assets.
The sovereign fund's more recent ventures involved investing in energy, infrastructure and power projects in developed markets, which typically surpassed at least $100 million as the company had limited staff to do due diligence, the president said.
"We have held no more than 20 percent in any of our recent investments in developed countries," Gao said, but noted the fund would not cap its stakes in overseas companies at such a level.
"However, our past behavior is actually indicative about what will happen," he added.
CIC, which kept its powder dry during the global financial crisis, has accelerated the pace of its investments across a broad range of sectors since the second quarter of this year, when the global economy began to rebound from the year's lows.
Lou Jiwei, chairman of the company, said in October that the fund invested half of the $110 billion it holds in available capital in overseas markets, and expects to reap a decent return from it.
He said the company would stick to its overall investment strategy of resting the bulk of its investments in publicly traded financial products and taking direct investments as a way to maximize profits.
The company has made a string of investments in commodity and energy related companies, including $2.2 billion in Virginia-based wind power generator maker AES Corp and HK$5.5 billion in domestic, renewable energy company GCL-Poly in November as well as $500 million in October in SouthGobi, a Canadian company that mines coal in Mongolia.
CIC, which saw the value of its total assets reach $298 billion at the end of last year, was set up in 2007 to manage part of the nation's burgeoning foreign exchange reserve.
