China sovereign wealth fund CIC profit rises 1.88% in 2016

[BEIJING] China's sovereign wealth fund China Investment Corp (CIC) on Tuesday reported a 1.88 per cent rise in 2016 net profit, boosted by stronger return from its overseas portfolio.

Profit rose to US$75.3 billion, from US$73.9 billion a year earlier, its annual report showed. Total investment income was US$83 billion in 2016, compared with US$76.7 billion in 2015.

"Eight years following the global financial crisis, major economies' rounds of easing policies and developed countries'sluggish economic recovery lead to intensifying competition among global funds, adding pressure on investment returns," CIC Vice-Chairman and President Tu Guangshao said in the report. "Potential risks are the rising uncertainties of global politics and policies," he said, referring to the outlook for 2017.

CIC, headquartered in Beijing, was founded in 2007 to help China earn a higher return on its foreign exchange reserves. The fund reported a 6.22 per cent return on its overseas investments in 2016, compared with a negative 2.96 per cent in 2015.

Its accumulated annualised investment return rose to 4.76 per cent.

The fund increased investment in alternative assets, and its overseas investment arm signed 16 deals worth US$5 billion, it said.

Last month CIC signed the buyout of European warehouse firm Logicor Ltd from Blackstone Group LP for 12.25 billion euros (S$19.3 billion), Europe's biggest private equity real estate deal.

It also changed its investment program earlier this year, opening an office in New York and shifting attention to the United States.

Earlier this month, CIC joined a consortium led by TIAA Private Investments and Antarctica Capital LLC to buy InterPark LLC, the largest owner-operator of parking infrastructure in the United States from Alinda Capital Partners LLC.

CIC started with initial funding of US$200 billion. By the end of 2016, its assets had surpassed US$813.5 billion.

REUTERS