CIC speeds up investment in North America

Focusing on financial and energy companies, the China Investment Corporation (CIC) is expanding its holdings in North America.

Earlier this month, the United States Securities and Exchange Commission (SEC) revealed that CIC agreed to pay 817 million U.S. dollars for a 45 percent interest in a joint venture to develop Penn West Energy Trust's Peace River oil sands assets along with an additional 435 million U.S. dollars to take a 5 percent equity stake in the trust itself.

Less than three months ago, SEC also revealed that CIC has invested in U.S. power company AES Corporation and now hold 15.8 percent. The two transactions involve about 2 billion U.S. dollars total.

As of the end of 2009, China Investment Corporation has invested in 84 listed companies in the United States, totaling more than 9.6 billion U.S. dollars. Financial and energy sectors seem to have received the largest amounts of money.

The three companies that received the largest investments are: Tektronix Resources, Morgan Stanley and Blackstone, which received 3.5 billion U.S. dollars, 1.8 billion U.S. dollars and 710 million U.S. dollars, respectively, accounting for 63 percent of the total.

About a quarter of the 9.6 billion U.S. dollars are invested in exchange-traded funds, but these funds focus on non-US markets.

In addition, the remaining less than 15 percent of investments are in dozens of listed companies, including Johnson & Johnson, Coca Cola and other companies in the Dow Jones Industrial Average. Apple and other new companies are also attractive to the investment company. CIC holds 6.3 million U.S. dollars of Apple stock.

It is worth mentioning that Shanda Games, a Chinese company listed in the United States, is also on CIC‘s list of investments.

In fact, the CIC deployed 110 billion U.S. dollars for overseas investment, of which the 9.6 billion U.S. dollars investment in stocks of U.S. listed companies accounts for less than 10 percent.

According to Reuters reports, in the China Investment Corporation portfolio, about 25 percent are stocks, 18 percent are fixed income products, 8.8 percent is in "inflation-indexed" securities, about 9.4 percent for hedge fund investment, 7 percent is private equity, 8.6 percent in cash, 18.9 percent for "special circumstances" and about 4.3 percent of funds is invested in other assets.

CIC is an investment institution established as a wholly state-owned company. It is operated on a commercial basis, seeking stable and long term risk-adjusted financial returns.

By People's Daily Online