China Sovereign Fund To Move Money Management In-House

Feb 10 2010 | 12:56pm ET

China’s massive sovereign wealth fund plans to began managing more of its own money this year, just months after announcing a plan to pour billions into hedge funds.

China Investment Corp. Chairman Lou Jiwei said the $300 billion fund would increase the amount of overseas investments it manages in house. CIC is planning a steady increase in overseas investments this year.

“As of now, most of CIC’s overseas funds are managed by outside portfolio managers,” the China Securities Journal paraphrased an article published by Lou on Monday. “But we will gradually increase in-house investment in more efficient developed markets in the future.”

The CSJ did not indicate where Lou’s Monday article was published.

News of CIC’s plans come in the wake of a Friday filing with the U.S. Securities and Exchange Commission, in which the sovereign fund listed some of its investments in the U.S. CIC had some $9.63 billion invested in the stocks of 60 American companies at the end of last year, including Apple, Citigroup, Coca Cola, Morgan Stanley and News Corp.

The filing did not include any of CIC’s hedge fund investment, nor its stake in The Blackstone Group. It is unclear if the sovereign fund’s plan to do more of its investing in-house will affect its plans to pour billions into hedge funds. Last year, CIC invested about US$2 billion in hedge funds managed by Blackstone, Capula Investment Management, Morgan Stanley Investment Management and Oaktree Capital Management.


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