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China Investment Corp. reports 17.6% gain on overseas investments

China Investment Corp. Vice Chairman and President Tu Guangshao

China Investment Corp. ended 2017, the 10th anniversary of the sovereign wealth fund's establishment, at $941.4 billion, up 15.7% from the year before.

Tu Guangshao, the Beijing-based fund's vice chairman and president, in his introduction to the annual report CIC released Monday, attributed the strong results to an improving world economy and CIC's growing skills in navigating investment markets.

"Grasping opportunities through rigorous research and prudent investments, CIC scored brilliantly, posting a record high of 17.59% net return on overseas investment," Mr. Tu said.

That gain was almost triple the 6.22% net return for 2016, and brought cumulative net returns since the fund's inception to 5.94% — exceeding CIC's 10-year target, the annual report said.

A CIC spokesman declined to say what target had been set for the 10-year period or provide further details about the fund's strong results investing overseas.

CIC's portfolio encompasses three major divisions — Central Huijin, which holds shares in 17 mainland financial institutions; CIC International, which invests in public equity and bond markets overseas, hedge funds and multiasset strategies as well private equity and real estate; and CIC Capital, which makes direct investments in private markets funds.

CIC doesn't break out assets each division oversees.

The annual report showed CIC's investment income for the year — including interest and dividend income, net realized gains on investments, unrealized gains from changes in fair value and investment income from long-term equity investments — rising 38% to $114.5 billion for 2017 from $83 billion the year before.

CIC's overseas portfolio had a 43.6% allocation to public equity, a continued decline from 45.9% in 2016 and 47.5% in 2015. The fund's alternative asset weight, meanwhile, continued to climb to 39.3%, from 37.2% in 2016 and 34.8% in 2015.

The fund's fixed income allocation edged up to 15.9% from 15.0% in 2016 and 14.4% in 2015. Cash fell to 1.2% from 1.9% the year before and 3.3% in 2015.