China Investment Corporation Ltd. (CIC), the national sovereign wealth fund, will start a 4-billion-U.S.-dollar fund with New York-based J.C. Flowers & Co. (JCF), a report on hexun.com, a leading Chinese finance website, said Friday.
The fund, focusing on overseas financial institutions, will be managed by JCF, a private-equity firm.
The CIC will provide 80 percent of the initial investment and JCF will put in 10 percent. The rest will come from other investors.
CIC deputy general manager Wang Jianxi said in early March that the company had contacted about 100 foreign fund managers. CIC wanted a broad range of low-correlation assets to achieve long-term returns, he said.
The CIC was set up in September to increase the value of China's huge foreign exchange reserves, which stood at 1.53 trillion U.S. dollars at the end of 2007.
In December, the CIC agreed to take a 5-billion-U.S.-dollar stake in U.S.-based Morgan Stanley. It also invested 3 billion U.S. dollars in the U.S. private equity firm Blackstone Group and put 100 million U.S. dollars into the initial public offering of the China Railway Group in Hong Kong.
(Xinhua News Agency April 5, 2008)