China Investment Corp., the $653 billion sovereign wealth fund, set up a company in January to focus on direct equity investments, a senior executive said.
The new unit, which will integrate CIC's existing direct investment operations, will seek to work with Chinese companies looking for overseas investment opportunities, Zhao Haiying, a member of the executive committee of the Beijing-based fund, said in an interview.
The establishment of CIC Capital will help the sovereign wealth fund improve the efficiency of its direct investments, Ms. Zhao said. CIC's returns on its overseas portfolio dropped last year amid “complicated” global economic conditions, she said, without being specific.
CIC Capital, which will operate on a commercial basis, will focus on opportunities in areas including infrastructure and agriculture, she said without elaborating. The unit can jointly invest with other Chinese companies, or cooperate in other ways, she said.
“We're exploring a lot of projects, and talking to many companies,” Ms. Zhao said, without naming any.
CIC “fine-tuned” its investments last year amid those global economic conditions and “significant divergence among regions,” slightly boosting equities while reducing government bonds, she said.
Returns on CIC's overseas portfolio last year remain “acceptable” although they were probably lower than 2013, Ms. Zhao said, adding the numbers haven't been finalized. CIC has yet to release its 2014 annual report. In 2013, CIC posted a 9.33% return on its investments abroad, it said in August.
