Following 18 months of rumor, the China Investment Corp (CIC) is merging CIC International and CIC Capital, bringing together overseas private equity and infrastructure operations merged into a single unit, according to Bloomberg.
Like the Abu Dhabi Investment Authority (ADIA), CIC is one of the few sovereign wealth funds to have not yet released its full-year 2021 results. Global SWF estimates its total assets under management at the year-end totalled US$1.39 trillion, putting it within a hair’s breadth of Norway’s Government Pension Fund Global (GPFG), which is managed by Norges Bank (NBIM).
CIC’s domestic holdings, gathered under Central Huijin, reported a 10.1% increase value. Based on our benchmark analysis, the overseas portfolio increased by 20.7%, implying US$1.39 trillion AuM – putting it neck and neck with GPFG as the world’s biggest SWF. Global SWF analysis finds that Central Huijin represented 63% of the portfolio in 2021 (down two percentage points from 2020), with the rest comprising overseas assets.
The purpose of the organizational overhaul appears to be related to improving efficiency of operations as well as responding to a higher staff turnover. The overseas units are now guided by two committees overseeing public assets and non-public assets, said Bloomberg.
CIC Capital was created in 2015 to support the expansion of Chinese companies on global markets as well as bolster private equity returns, but its functions are increasingly overlapping with CIC International. Additionally, it has been challenged by regulatory obstacles in the US, which made dealmaking more problematic.
Following the election of Joe Biden and the promise of a thawing in Beijing-Washington relations, CIC has renewed its push for long-term investment opportunities in the US. The China-U.S. Industrial Cooperation Fund, co-established with Goldman Sachs in November 2017, has progressed very slowly towards its US$5 billion target. CIC has been co-investing with private-equity fund managers such as France’s Eurazeo SE and Japan’s Nomura Holdings and secured investments via its UK-China Cooperation Fund, Japan-China Capital Partners and two other cooperation funds with Italy and France.