CIC expands portfolio with major investment bank stake

The China Investment Corporation (CIC) is having its domestic portfolio boosted through the transfer of the 43.5 per cent stake in China International Capital Corp (CICC), the country’s largest investment bank, by it’s state-controlled brokerage firm, China Jianyin Investment Securities.The CICC stake has been approved for transfer to the CIC’s domestic subsidiary, Central Huijin Investment Co, which was created to oversee the Government’s interests in large Chinese financial institutions, including the major banks.

Almost half of the sovereign wealth fund’s $300 billion at inception in September 2007 consisted of these bank assets. However, Central Huijin has a separate governance structure from the CIC’s mainly international direct and portfolio investments.

Other shareholders in CICC include Morgan Stanley, China National Investment and Guaranty Co, Government of Singapore Investment Corp and Mingly Corp.

Morgan Stanley was reported to have been looking to sell its 34 per cent stake in CICC early this year but nothing appears to have eventuated.

CICC is in the process of finalizing a new fund which will look to raise $300 million for Chinese private equity investments. That raising is to take place from next month, according to reports, through the CICC’s Hong Kong business arm.