CIC's profit up on record overseas returns

BEIJING • China's sovereign wealth fund, China Investment Corp (CIC), posted a 37.55 per cent rise in 2017 net profit, boosted by record-high returns from its overseas portfolio.

Profit rose to US$103.62 billion (S$140 billion) from US$75.34 billion a year ago for CIC, a shareholder in China's largest banks such as China Development Bank Corp as well as Industrial and Commercial Bank of China.

CIC's total investment income was US$114.46 billion, versus US$83.03 billion in 2016, its 2017 report showed yesterday.

It reported a 17.59 per cent net return on its overseas investments, an all-time high, versus 6.22 per cent in 2016.

CIC invests overseas through two units, CIC International Co and direct investment vehicle CIC Capital Corp.

The latter made 20 overseas investment decisions last year with a total committed investment figure of US$3.8 billion.

The wealth fund hopes to invest more in US markets, CIC president Tu Guangshao said at a press conference in Beijing, adding that concerns about any impact on the fund's investment plans from mounting trade tensions between the countries were "totally unnecessary".

Offshore strength pushed the fund's annualised accumulative investment return for the 2007 to 2017 period to 5.94 per cent, exceeding the fund's performance review target, CIC said.

Headquartered in Beijing, CIC was founded in 2007 to help China earn a higher return on its foreign exchange reserves.

In the past, CIC has invested in several overseas companies ranging from online property rental firm Airbnb to Canadian mining company Teck Resources to United States private equity house Blackstone.

CIC, however, sold its equity holding in Blackstone in March, exiting from an 11-year old investment.

Through its Central Huijin Investment subsidiary, CIC is a shareholder in 17 Chinese state-owned financial institutions, including China Construction Bank Corp and Agricultural Bank of China.

REUTERS

A version of this article appeared in the print edition of The Straits Times on July 10, 2018, with the headline 'CIC's profit up on record overseas returns'. Print Edition | Subscribe