China Investment Corp. Friday reported a 9.33% gain on the overseas portion of its investment portfolio for its fiscal year ended Dec. 31, which helped lift the value of its total portfolio to US$652.7 billion.
The latest gain for CIC's overseas assets was down from 10.6% in 2012.
CIC's investment assets are housed in two subsidiaries: CIC International Co. Ltd., for the sovereign wealth fund's overseas investments; and Central Huijin Investment Ltd., for its holdings of controlling stakes in key, state-owned financial institutions in China.
The CIC annual report, released Friday, didn't break out the respective totals for the two subsidiaries, and a CIC spokesman couldn't be reached immediately for comment.
The annual report credited an asset allocation shift into equities for contributing to the overseas portfolio's advance.
As of Dec. 31, public equities accounted for 40.4% of the sovereign wealth fund's overseas portfolio, up from 32% the year before. Allocations to every other major asset segment declined.
The investment analysis highlighted a strengthening of CIC's sell discipline over the past year, saying “we took advantage of market opportunities to partially or fully exit over 10 direct investments, harvesting good returns.”
For the year, the fund's allocations to “long-term” asset segments such as private equity and real estate dropped to 28.2% of the portfolio from 32.4%.
Among other major segments, allocations to fixed income fell to 17% from 19.1%, while absolute-return strategies slipped to 11.8% from 12.7% and cash/others declined to 2.6% from 3.8%.
The fund's allocations to publicly listed equities appeared to shift in favor of Europe at the expense of the U.S. and emerging markets, which declined, respectively, by 3.1 percentage points to 46.1% and 5.9 percentage points to 17.1%. Allocations to developed markets other than the U.S. jumped 9 percentage points to 36.8%.
Meanwhile, external managers were overseeing a 67.2% chunk of the CIC's overseas portfolio as of Dec. 31, up from 63.8% the year before.
And just more than six weeks after China's National Audit Office criticized the CIC in broad terms for the way it had selected some overseas managers, the CIC annual report noted “we improved the selection and evaluation process of external managers,” to enable “the objective assessment and adjustment of external managers.”
