<article><p>China’s $930 billion sovereign wealth fund plans to expand investments in areas such as real estate, hedge funds, infrastructure and private equity for more stable returns, as it reduces exposure to volatile public markets.</p></article>

<p>China’s $930 billion sovereign wealth fund plans to expand investments in areas such as real estate, hedge funds, infrastructure and private equity for more stable returns, as it reduces exposure to volatile public markets.</p>
<p>China Investment Corp., which recently sold its shares of Blackstone Group LP, is seeking to boost alternative and direct investments to 45 percent or more of its overseas portfolio in the next three years, from about 38 percent at the end of last year, President Tu Guangshao said in an interview in Beijing.</p>
<p>The divestment of the Blackstone stake, one of the first investments for the wealth fund that was started in 2007 with an initial $200 billion, may signal CIC’s pursuit of steadier returns. It ends a wild ride for CIC &#8212; Blackstone shares plunged 89 percent from the U.S. firm’s IPO to a February 2009 trough, but have since surged almost nine-fold.</p>
<p>A CIC spokeswoman said the Blackstone investment produced a “positive return,” and that the move was based on “changes in market conditions and our portfolio management needs.” Blackstone’s Chief Executive Officer Stephen Schwarzman said in a Bloomberg Television interview that CIC’s investment in his company lasted longer than expected.</p>
<h3>‘Working Together’</h3>
<p>The divestment doesn’t mark a break between CIC and the firm; it is an investor in funds run by New York-based Blackstone and CIC’s spokeswoman said the two are “working together in areas including private equity, real estate funds, co-investments, direct investments as well as hedge funds.” And in its biggest direct investment, CIC last year led the $13.8 billion acquisition of Blackstone’s European logistics business Logicor.</p>
<p>Trade tensions between China and the U.S. have intensified in recent weeks, as President Donald Trump has ordered stiff tariffs on steel and aluminum, and signaled more actions are on the way.</p>
<p>Read more: China Minister Says Trade War Would Bring ‘Disaster’ to World</p>
<p>Even as trade friction between China and the U.S. is rising, Tu said the wealth fund still wants to explore direct investments in the U.S., which can also help deepen economic ties. Most of CIC’s existing private equity partners are American firms, he noted, without being specific.</p>
<p>“It’s a very good thing to do, but sometimes even good things are hard to accomplish,” Tu said, citing the bilateral funds CIC has been working on that he said can help reduce resistance, if any, in the target markets. “A lot of work still needs to be done before consensus is formed,” he said without elaborating.</p>
<h4><em>Bloomberg</em></h4>


China’s $930 billion sovereign wealth fund plans to expand investments in areas such as real estate, and private equity for more stable returns.

China's $930b state fund to shift to PE, real estate for more stable returns

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