China’s sovereign wealth fund China Investment Corporation (CIC) is preparing for a strategic shift and will focus more on direct investments and proprietary relationships with fund managers.
It has reshuffled its infrastructure team to guide the shift in focus. The firm has created a new division, named Department 2, which will invest in consumer and industrial sectors, to be led by Mi Tao, reported Infrastructure Investor.
The existing Department 1 will now be led by Benjamin Bao, and includes three infrastructure teams managed by Yan Wang, David Xie and Yuling Lu.They will look to invest in areas like renewable energy, transport and utilities. Other teams will focus on oil & gas and metals & mining.
CIC manages China’s huge foreign exchange reserves and invests around the world.
CIC will look to tap into infrastructure investment opportunities in emerging economies, at a time when there is strong demand for core assets in the developed world. There is a growing demand for critical infrastructure in Asia that few players are tapping into.
CIC has also been considering investing in the $2.8 billion Thailand Future Fund, established last year to fund domestic infrastructure projects. It is also part of a consortium along with China Southern Power Grid Co., and Qatar Investment Authority, the sovereign wealth fund of the middle-east nation, that plans to have a stake in the privatisation of a transmission network in New South Wales in Australia.
China’s clout has been growing in the world of finance. In January, U.S. allies including Australia, Britain, German, Italy, the Philippines and South Korea agreed to join the Asian Infrastructure Investment Bank (AIIB) despite opposition from Washington.
The AIIB is expected to lend $10 billion-$15 billion a year for the first five or six years and will start operations in the second quarter of 2016.