Sovereign Wealth Fund Institute

According to the Independent, “China’s biggest sovereign wealth fund is in talks to buy a stake in one of London’s tallest skyscrapers being developed by Britain’s largest property company.

The China Investment Corporation (CIC) has approached Land Securities about taking an equity stake of up to 25 per cent in the proposed “Walkie-Talkie”, the 500 ft tower at 20 Fenchurch Street designed by Rafael Vinoly. Land Securities won planning consent for the Square Mile site two years ago after a public inquiry sparked when English Heritage and others objected to its impact on the sight lines to St Paul’s Cathedral. The 36-storey building (down nine floors from the original plan) will cost an estimated £300m to build and is scheduled for completion in 2014.

It is nicknamed the Walkie-Talkie because of its top-heavy shape, designed to maximise high-rent floor space on the upper stories.

The FTSE-100 company entered into exclusive discussions with Canary Wharf Group to jointly develop the site in June. As part of the proposed deal, Canary Wharf would build the tower. These talks are still ongoing but it is thought that CIC, a wholly owned state company based in Beijing, has entered the negotiations.”

Read more: Independent

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It was a deal of the decade, when the CIC piled cash into the ailing investment bank Morgan Stanley. Now the CIC is slowly selling shares as its investment’s stock price rebounded from the trenches, especially after the failed Morgan Stanley deal with Mitsubishi UFJ. The China Investment Corporation is always looking for the next greatest long term deal; in fact they have a whole unit dedicated for special investments.

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China’s sovereign wealth fund is set to post its best yearly gain in 2009 after stepping up investments in commodities to ride a rebound in global markets.

China Investment Corp. is likely to report a return on its global portfolio “well over 10 percent” in its upcoming annual statement, said Rachel Ziemba, London-based senior analyst at Roubini Global Economics. The $300 billion fund had a 2.1 percent loss on its global assets in 2008, after chalking up a 0.2 percent return in its starting year of 2007 when the value of a $3 billion investment in Blackstone Group LP plunged.

Chairman Lou Jiwei pumped nearly $10 billion into commodity-related companies such as Canada’s Teck Resources Ltd. in the second half to benefit from the global economic recovery. That compared with $4.8 billion in new investments across all industries for the entire 2008.

“2009 results should be good because commodities staged a strong rally,” said Francis Lun, general manager at Fulbright Securities Ltd. in Hong Kong. “CIC was very timid, which actually helped it to avoid the financial tsunami” in 2008.

According to the CIC press release, “CIC recently appointed Mr. John Mack and Mr. Joseph Yam as members of its International Advisory Council (“the Council”), to serve a term of two years. Meanwhile Mr. Arminio Fraga and Mr. Lawrence Lau resigned from the Council due to personal reason or concern on potential conflict of interest in business.

Mr. John Mack is Chairman and former CEO of Morgan Stanley; Mr. Joseph Yam is Executive Vice President of the China Society for Finance and Banking, and former Chief Executive of the Hong Kong Monetary Authority.”

Source: China Investment Corporation Press Release

According to the press release, “The AES Corporation (NYSE: AES) and China Investment Corporation (CIC) announced today that their non-binding Letter of Intent for a 35 percent investment in AES Wind Generation, which was signed on November 6, 2009, expired as of June 30, 2010. AES and CIC may resume discussions as additional clarity develops surrounding renewable energy legislation in the U.S.”

Read more: Press Release

According to the NY Times, “A company here that is partly owned by the Chinese government has quietly purchased a 5.1 percent stake in the only American-owned provider of enriched uranium for use in civilian nuclear reactors. The company that bought the stake, the Noble Group, is the world’s second-largest commodities trading and logistics company after Cargill and is based here. One of its minority owners is the Chinese government’s sovereign wealth fund.

The American company is USEC, which is based in Bethesda, Md., and enriches uranium so that fission can occur in nuclear reactors. It currently supplies enriched uranium for use in the United States, Japan, South Korea and Taiwan. Noble said in a filing with the Securities and Exchange Commission that it had purchased the shares on the open market from May 25 to June 2.

Read more;: NY Times

According to Market Watch, “a senior official with China’s massive sovereign-wealth fund said Tuesday that while 2009 was good for the nation’s market investments, this year is proving to be tough, according to reports.

In rare public comments, China Investment Corp.’s Executive Vice President Jesse Wang said recent corrections in Western markets had peeled off one-tenth of the fund’s value.

“In May and June, because of the decline of the U.S. market and European market, we had about 10% mark-to-market losses,” Wang was quoted as saying at an event hosted by the Federal Reserve Bank of San Francisco.

The recent drop compared to gains for 2009, which Wang called “a good year for us,” as CIC managed a return of 11% overall and more than 17% if results from its domestic arm Central Huijin Investment Ltd. are excluded, according to Reuters.

Official 2009 results for CIC, which has approximately $300 billion under management, are slated for release sometime in the next two months.

Wang said that while CIC had hope bonds and other fixed-income holdings would shield it from volatility, this portfolio was hit by the euro’s fall against other major currencies, according to Dow Jones Newswires.

Read more: Marketwatch

According to the press release, “Penn West Energy Trust (“Penn West”) is announcing the closing of the previously announced joint venture partnership (the “Partnership”) with an affiliate of China Investment Corporation (“CIC”). The Partnership has been formed to develop Penn West’s bitumen assets located in the Peace River area of northern Alberta (the “Assets”). Penn West contributed the Assets valued at approximately $1.8 billion to the Partnership and has retained a 55% interest in the Partnership. CIC has acquired a 45% interest in the Partnership by investing approximately $312 million in the Partnership (which has been paid to Penn West by the Partnership to satisfy outstanding indebtedness to Penn West) and committing to carry a portion of Penn West’s share of the Partnership’s future capital and operating expenses totaling approximately an additional $505 million. An affiliate of Penn West will serve as operator of the Assets.

Penn West also closed the previously announced private placement of 23,524,209 trust units of Penn West to an affiliate of CIC for proceeds of approximately $435 million.

Penn West will use the approximately $747 million of proceeds received for general corporate purposes.”

Source: Penn West Press Release

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Press release states, “Goodman Group (Goodman or the Group) announces that it has signed a Memorandum of Understanding (MOU) with the Langfang Municipal Government to participate in the development of a premier business and logistics hub for the greater Beijing-Tianjin area in northern China.”

Later on it reads, “Mr Goodman said, ‘This announcement, which has been made possible through the strength of our cooperation with the China Investment Corporation (CIC), marks an important step in the continued development of our Asian business and is a further indication of our growing and longterm commitment to the China market. Goodman expects to generate fee income over the life of the project and will also consider further investments for itself and its investment partners in the development of logistics and business park product at the site on a case by case basis.’”

read more: Goodman Press Release

According to the Press Release, “Penn West Energy Trust (“Penn West”) is pleased to announce it has entered into an agreement (the “Agreement”) with a wholly-owned subsidiary of the China Investment Corporation (“CIC”) to form a joint venture (the “Joint Venture”) that will develop Penn West’s bitumen assets located in the Peace River area of northern Alberta (the “Assets”). CIC has also agreed to purchase trust units (“Units”) of Penn West on a private placement basis (the “Financing”). Strategic Rationale Penn West is committed to an exploration and production strategy which will fully assess and realize the potential of its extensive resource play portfolio.

The Joint Venture is an important element of our strategy as it provides for the development of the Assets from the current resource appraisal phase through to commercial scale development and production. The cash proceeds from the Joint Venture and the Financing provide Penn West with additional financial flexibility to strategically advance the development of its significant ownership of light-oil resources.

Penn West and CIC believe the Assets to be a ‘world-class resource’ and as such view the production and reserves potential of this project to be substantial. CIC’s financial commitment, combined with Penn West’s operational resources, will enable the Joint Venture to complete the resource appraisal of the area and accelerate development.”

Read more: Penn West Energy Trust Press Release

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Xinhua reports, “China Investment Corporation (CIC) will soon reshuffle its senior managerial posts as the country’s sovereign wealth fund and other top state-owned lenders are gearing up for the initial public offering of Agricultural Bank of China, reported Saturday’s China Daily.

Vice President of Bank of Communications (BankComm) Peng Chun will soon replace Xie Ping as general manager of Central Huijin Investment Ltd., the domestic entity of China’s sovereign wealth fund, the daily cited “people with knowledge of the matter” as saying.

The English-language newspaper said Xie would remain a vice president of China Investment Corporation (CIC), which manages 300 billion U.S. dollar sovereign wealth fund.”

read more: Xinhua

According to Reuters, “China Investment Corp (CIC), the country’s $300 billion sovereign wealth fund, has cut by half, to $100 billion, the amount of new funding it is seeking from the government, according to domestic media.

An earlier proposal by CIC to the finance ministry for $200 billion in additional funding was not approved, the China Business News said, citing an unnamed source.

Media reports early this year and late last year said that CIC was seeking an additional $200 billion in cash to manage. The fund completed most of its investments for its initial funding in 2009, leaving relatively little cash on hand, but whether it would receive new funding was up to the central government to decide, Executive Vice President Jesse Wang said last month.”
read more: Reuters

According to Reuters, “China Central Huijin Investment Ltd., the domestic arm of China’s sovereign wealth fund, has applied for a $50 billion cash injection from the Chinese government, the National Business Daily said on Wednesday.

China Investment Corp (CIC), parent of Huijin, has submitted an application for cash aid to the State Council, the country’s cabinet, the semi-official paper said, citing an unnamed CIC source.

“The $50 billion Huijin requested may come from the foreign exchange reserves or other financial resources,” the source was quoted as saying.”

read more: Reuters

According to Business Week, “China’s $300 billion sovereign wealth fund sees a “good opportunity” to boost private-equity investments this year, as companies are undervalued after losses from the global financial crisis.

‘A lot of companies’ valuations are relatively low currently, and investors of many private-equity funds don’t have money to invest,’ China Investment Corp. Executive Vice President Jesse Wang said in an interview with the official Xinhua News Agency today that was broadcast online.

CIC had “double-digit” returns from its overseas portfolio last year, Wang said, without being specific. The company increased spending on energy and minerals assets in 2009 to profit from the global economic recovery, announcing almost $10 billion of investments in commodity-related companies.”

read more: Business Week

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According to MarketWatch, “China’s sovereign wealth fund said responsibility for any potential bailout of Greece should fall primarily on the European Union, marking the first official comments by the fund since reports in January that it was considering the purchase of Greek debt.

China Investment Corp. Executive Vice President Jesse Wang said helping Greece wasn’t within its main mission of chasing up sound financial returns, according to a report Friday by The Wall Street Journal. ‘Aiding Greece looks like a policy goal,’ Wang was cited as saying in the report. ‘If the E.U. is unwilling to help, how can you expect others to act as a white knight and save Greece?’“

read more: MarketWatch

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China Daily reports, “Sovereign wealth fund China Investment Corporation (CIC) has finalized a $956 million investment deal with British private equity fund group Apax Partners, a source close to the fund said yesterday. The source confirmed media reports that CIC was planning to invest $956 million in Apax Partner’s 11.2 billion-euro fund. Apax has already got approval from the British Financial Services Authority for the deal, which may also see CIC acquiring a 2.3 percent stake in the UK company.

The sovereign wealth fund is also in talks with Italian power operator Enel SpA on buying stakes in the energy firm and its subsidiary company Enel Green Power, the source said.

CIC’s moves may tempt other foreign private equity groups to solicit financial support from the Chinese sovereign wealth fund. It also shows that China is still eager to invest its burgeoning foreign reserves in foreign markets after the heavily criticized loss-making investment in Blackstone two years ago.

Li Xiaogang, director of the Foreign Investment Research Center at Shanghai Academy of Social Sciences, said although the global investment climate has shown strong signs of recovery, Chinese fund companies, especially the sovereign wealth fund, should remain cautious when engaging in overseas investment.

‘The risk is that Chinese fund companies are usually constrained from influencing the investment strategy of overseas fund companies,’ Li said. ‘They are still novices in the global financial market, and hence should be well prepared before making any investments in foreign PE funds or companies.’”
read more: China Daily

According to Bloomberg, “China Investment Corp., the nation’s sovereign wealth fund, has had “early” talks for direct investments in Brazil and Mexico, Chairman Lou Jiwei said.

The sovereign wealth fund plans to increase direct investments this year and prioritizes such investments in developing markets, Lou said at a financial forum in Hong Kong today. CIC plans to be an “active, minority” shareholder in companies, instead of being involved in day-to-day operations, he said.

“In developing countries, the public capital markets are not as deep as developed countries,” Lou said. “We’re more interested in direct investments in developing countries.”

CIC, which held almost $300 billion in assets at the end of 2008, last year accelerated investments in resource-related companies, from U.S. power producer AES Corp. to Russia’s Nobel Oil Group, to hedge against rising inflation. Brazil is the second-biggest exporter of iron ore, while China is the largest buyer of the raw material.”
read more: Bloomberg

Taipei Times reports, “A US-British asset management giant and a Chinese sovereign wealth fund have agreed to take part in the Hong Kong initial public offering (IPO) of the world’s largest aluminum producer, UC Rusal, a report said yesterday. Black Rock and China Investment Corp (CIC) have given their initial agreement to take part in the IPO along with Russian state banks whose interest was already confirmed, daily Vedomosti said. Quoting bankers close to the operation, the newspaper said that Rusal directors had late on Wednesday agreed on a valuation for the Russian metals giant of US$16 billion to US$22 billion for the IPO. Vedomosti said this would make Rusal — whose majority shareholder is the oligarch Oleg Deripaska — the largest aluminum firm worldwide by capitalization, ahead of US firm Alcoa, which is valued at US$15.9 billion.

Sources said earlier this month that Rusal won conditional approval for the IPO from the Hong Kong bourse, ending weeks of uncertainty over whether its billions of dollars of debt would thwart the plan. Rusal plans to float 10 percent of its shares valued at around US$2 billion in by far the biggest IPO by a Russian company since the economic crisis.

Vedomosti said Rusal was now planning to set the IPO price and complete the transaction by Jan. 20. Pre-marketing will start on Jan. 5 and a roadshow on Jan. 11. Around one-third of the shares will go to Europe-based funds and another third to Chinese funds. The Hong Kong bourse is not expected to allow private investors to take part. The involvement of investors like Black Rock — which has US$1.44 trillion of assets under management — should attract smaller funds and mean Rusal has no problem attracting interest in the IPO, Vedomosti said.

Rusal and Black Rock declined to comment, Vedomosti said.”

read more: Taipei Times

As part of the investment, CIC will buy a 2.3% stake in the private-equity group’s management company, Apax Partners Worldwide LLP, which is one of the largest of its kind in Europe, the Financial Times reported, without citing sources. The move shows China is still eager to invest abroad, even though it has been stymied in its attempts to do so in the past, the report said.

The deal is seen as unusual in that some of the funds currently held by Apex could be transferred to CIC, the report said. Two years ago, Apex raised 11.2 billion euros for its Apex Europe VII fund, one of the largest buyout funds in Europe, and has already invested about half of this, the Financial Times reported.

read more: MarketWatch

According to the China Investment Corporation’s Press Release, “China Investment Corporation (“CIC”) today signed a binding framework agreement with GCL-Poly Energy Holdings Limited (“GCL-Poly”) for the subscription of approximately 3,108 million shares of GCL-Poly at a price of HK$1.79 per share. The total investment is around HK$5.5 billion. The subscription is conditional upon, among other things, the signing of definitive documentation and approval by GCL-Poly’s shareholders. Upon completion of the subscription, CIC will own an approximately 20% stake in GCL-Poly on a fully-diluted basis. CIC and GCL-Poly intend to establish a joint venture to invest in and develop photovoltaic projects or other solar energy projects based on an initial capitalization of US$500 million.”

read more: China Investment Corporation Press Release

According to Business 24-7, “Protectionist barriers aimed at capital-rich sovereign wealth funds (SWFs) could backfire on the fragile global economy, top executives of major state investment firms warned yesterday. The sovereign funds have the capital needed by affected economies to recover from the global crisis but governments may come under domestic pressure to impose protectionist measures, they said. Tony Tan, Deputy Chairman of the Government of Singapore Investment Corp (GIC), said the biggest danger facing the world economy in coming years is protectionist sentiment, which may be stoked by high unemployment rates. Tan, speaking at a business forum on the sidelines of an Asia-Pacific summit, said protectionism could spread from the trade arena to financial markets.

“This could manifest itself in the form of protectionist measures not only in world trade but also in financial markets and impede the free flow of funds,” he said.

“If nothing else, this could derail the global economic recovery which all of us are hoping for,” said the GIC deputy chairman.

Jin Liqun, from the China Investment Corporation (CIC), also cautioned against barring investments from government-owned funds. “The sovereign wealth funds will be playing a big role in rebalancing the process but we need co-operation from the recipient countries,” said Jin, CIC’s chairman of the board of supervisors.

“There’s nothing we can do if we are barred from doing our jobs in your countries or when hurdles are very high for us to overcome,” he said.

Jin said sovereign funds can play a major role in restructuring economies.

“Countries need a cushion in undertaking major economic restructuring and provisional funding is of course crucial,” he said, adding that the global recovery was not irreversible.

When the global crisis unfolded, SWFs emerged as a source of crucial capital, especially to Western financial firms and banks in dire need of fresh funding. Singapore’s GIC, which manages the city-state’s reserves of more than $100 billion (Dh367bn), was one of the rescuers of US-based Citigroup and Swiss banking giant UBS. Kuwait Investment Authority’s (KIA) Managing Director Bader Al Saad told the forum that SWFs have collectively pumped $90bn into financial institutions in the last few years.

“I think now we are in a new era of engagement,” said Al Saad.

“There is a unique opportunity for the sovereign wealth funds to represent themselves as investors in the world… They are a long-term investor,” he said.

Al Saad also said perceptions that SWFs were a source of destabilisation in financial markets and that investments were driven by political agendas could not be further from the truth.

“Most of their transactions are cash transactions so there is a real economy and it shows that they are responsible investors,” he said.

“They are a source of stability and last but not least, they are strategic investors… On top of that, they never make hostile takeovers.”"

read more: Business 24-7

According to Wall Street Journal, “China’s sovereign-wealth fund has brought in a China-born portfolio manager with U.S. experience to run its hedge-fund investments, according ++to people familiar with the situation, marking its highest-profile hire so far.

Bill Lu, formerly a portfolio manager at U.S. hedge fund Tudor Investment Corp., has become a managing director at China Investment Corp. with responsibility for investments in hedge funds and hedge-fund-like investments in public-market securities, according to these people.

Mr. Lu, the third official to oversee CIC’s hedge-fund program since 2007, takes over the hedge-fund portfolio from Felix Chee, a Singapore native and former chief executive of the University of Toronto’s endowment fund. Mr. Chee is continuing to work at CIC as a special adviser to CIC’s chief investment officer, Gao Xiqing, according to a person familiar with the situation. It is unclear what prompted the change in Mr. Chee’s responsibilities. CIC’s recruitment efforts have so far focused mostly on taking staff from other Chinese government agencies to fill senior roles, hiring junior staff from investment banks to fill junior spots, and borrowing staff to fill in other gaps. Because it is state-owned, CIC isn’t able to offer salaries or bonus structures comparable to international financial firms.”

read more: Wall Street Journal

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According to the WSJ, “China Investment Corporation has reached a deal to invest up to $700 million in Mongolia-focused Iron Mining International Ltd., the latest move by the sovereign wealth fund to plow cash into commodities.

CIC is rapidly deploying its capital this year to try to catch the upside of a global economic recovery by buying into natural resources and property assets. On Wednesday, CIC Chairman Lou Jiwei told a forum that CIC has allocated $110 billion for overseas investments and deployed around half. Commodities have been a major focus of the fund’s investing strategy and asset allocation, he said.

Originally, CIC was expected to allocate only about a third of its initial $200 billion in capital, or just $67 billion, for overseas investments. Mr. Lou’s comments indicate that CIC has pumped around $40 billion of its cash hoard into other assets this year after having invested a total of $13.52 billion by the end of 2008, according to data from CIC’s annual report. The terms of CIC’s investment in Iron Mining International involve a $500 million convertible loan, with an option for the company to increase the loan to $700 million, according to people familiar with the situation. The company, formerly known as Hong Kong Lung Ming Investment Holdings Ltd., is planning to raise $1 billion through an initial public offering in Hong Kong during the second quarter of next year, one person said. CIC’s investment is structured so that the loan will become ordinary shares at the time of Iron Mining International’s IPO at a discount to the IPO price, the person said.”

read more: WSJ

According to the Press Release, “Alexander Molyneux, President and CEO of SouthGobi Energy Resources Ltd., announced today that SouthGobi will accelerate the development of its Mongolian coal projects through its wholly-owned Mongolian operating subsidiary, Southgobi sands LLC. SouthGobi’s Mongolian investment program during the next three to five years is planned to include:

Mr. Molyneux said financing for the investment program has been secured from a wholly-owned subsidiary of China Investment Corporation (”CIC”), which will provide US$500 million in the form of a secured, convertible debenture bearing interest at 8.0%.

‘Our continued exploration successes have significantly expanded our coal resources in Mongolia’s South Gobi – and now we are in a position to develop our company into a prominent regional producer and exporter,’ Mr. Molyneux added.

‘We recently announced our Measured and Indicated coal resource base, compliant with the Canadian NI 43-101 reporting standard, has increased from 221.2 million tonnes to 307.6 million tonnes, a jump of 39%. We also announced the initial resource at Soumber, an entirely new coal deposit in the South Gobi, and there is significant potential for other discoveries.’”

read more: Press Release

According to the China Investment Corporation, “CIC has completed the settlement for its Phase I investment in 45% of the equity in Nobel Oil Group (“Nobel”) based in Russia. HongKong’s Oriental Patron has acquired 5% equity stake. The original Russian shareholders maintain their 50% stake. CIC has agreed to invest US$ 300 million in aggregation in this transaction. The US$ 150 million in Phase I investment includes $ 100 million for the purchase of equity stake from Russian shareholders and $ 50 million for Nobel’s operating expenses. In Phase II, the remaining US$ 150million is to be used within 9 months for acquiring and developing oil reserve assets (approximately 150 million barrels) in close proximity to Nobel’s existing oilfields.”

read more: CIC

According to Bloomberg, “China’s sovereign wealth fund bought a stake in the London-traded unit of Kazakhstan’s state-run energy company, taking its spending on resources to at least $3.69 billion this month.

China Investment Corp., which holds almost $300 billion, bought an 11 percent stake in Astana, Kazakhstan-based JSC KazMunaiGas Exploration Production for about $939 million by purchasing global depositary receipts, according to a statement dated today on the Beijing-based fund’s Web site.

China is hunting for resources from Canada to Nigeria to support expansion in the world’s fastest-growing major economy. Today’s deal follows a combined $2.75 billion spent by the fund on Indonesia’s PT Bumi Resources and Noble Group Ltd. last week.

‘The reason why China is investing in assets like this is simple: it needs more oil and gas,’ said Shi Yan, an analyst at UOB-Kay Hian Ltd. in Shanghai. ‘China also has huge financial reserves and with commodity prices still down from highs last year, it’s still a good time to buy.’”

read more: Bloomberg

According to the Wall Street Journal, “the Inter-American Development Bank is in talks with China Investment Corp. on a US$1 billion arrangement for trade promotion co-financing, Jean-Marc Aboussouan, chief of the multi-lateral lender’s infrastructure division, said Wednesday.

‘Talks are going well,’ Aboussouan added.

Earlier, Steven Puig, vice president for the private sector and non-sovereign guaranteed operations of the Washington-based IDB, said the IDB was poised to announce the arrangement with a Chinese agency. CIC is China’s $300 billion sovereign wealth fund. The IDB is the largest source of multilateral financing for Latin America and the Caribbean.”

read more: Wall Street Journal

According to the press release, “PT Bumi Resources Tbk (“Bumi”) announced that China Investment Corporation (“CIC”) has invested US$1.9 billion in Bumi in the form of a debt-like instrument. The US$1.9 billion investment consists of US$600 million repayable in year 4, US$600 million in year 5, and remaining US$700 million in year 6. The investment attracts a 12% annual cash coupon with a total IRR of 19%, the balance payable at the time of final maturities. The funds will be used for debt restructuring and capital expenditure.

‘We are honored by this historic and transformational investment by CIC, the leading sovereign fund in the world. The investment will enable Bumi to implement its growth strategies quickly and provide a stable capital structure. More importantly, the partnership creates the platform for CIC and Bumi to pursue investment opportunities jointly’, remarked Ari Hudaya, President Director and CEO of Bumi, one of the leading natural resources companies in Asia with world-class coal assets. CIC, wholly-owned by the People’s Republic of China, is one of the largest and reputable investment institutions in the world. Bumi is Indonesia’s largest producer and one of the world’s largest exporter of thermal coal with strong practices in community development, corporate social responsibility and corporate governance.

PT Samuel Sekuritas Indonesia acted as arranger and financial advisor, and Jones Day acted as legal advisor to Bumi. Deutsche Bank and China International Capital Corporation (CICC) acted as financial advisors and Davis Polk & Wardwell acted as legal advisor to CIC in this transaction.”

read more: Press Release

Press Release states, “The Noble Group (SGX: NOBL) is pleased to announce today an agreement to place 573,000,000 number of shares, for a total consideration of approximately USD 850,000,000 to China Investment Corporation (“CIC”) at a price of SGD2.1137 per share. The placement comprised of 438,000,000 newly issued shares by the Company and 135,000,000 shares from trusts associated with the interests of Noble founder and CEO Richard Elman. The placement is subject to approval of the respective boards of directors of Noble Group and CIC and final legal documentation.

The placement was the result of extensive discussions between the two parties and underscores the expertise the Noble Group has developed in supply chain management and the distribution of commodities, particularly agricultural products. Noble’s diverse agricultural activities include farm production in Argentina, Uruguay, and Brazil which is linked to an internal logistic and storage capability. Access to export markets is further supported by 5 owned port facilities throughout South America. Noble’s other agricultural assets include crushing plants and sugar refineries.

The newly issued shares will provide the Noble Group with additional capital to pursue strategic investments in key agricultural markets globally.

The shares sold by interests associated with Mr. Elman represent a small fraction of his holdings in the Noble Group and are only the second such sale by Mr. Elman since he founded the Group. It is the intention of Mr. Elman to use some of the proceeds associated with the sale of his interests in Noble to fund a charitable foundation with a focus on fostering international relations amongst Asian nations. The sale by Mr. Elman in no way reduces Mr. Elman’s commitment to Noble Group, the company which he founded and continues to be involved in day to day management.

CIC and Noble have agreed to enter into this partnership for the purpose of jointly investing in infrastructure assets and supply chain management related to agricultural commodities. It is the intention of both companies to bring to bear their respective strengths to achieve results which are satisfactory to their respective shareholders and bring benefits to consumers of agricultural products worldwide.

Mr. Elman commented “We are all extremely pleased with the investment by CIC in Noble and heartened that they, like us, evaluate the evolution and success of a company over decades as opposed to merely fiscal quarters. We think the opportunities to work together over the coming decades will be tremendous and we look forward to working together.”

Merrill Lynch (Singapore) Pte. Limited acted as the sole placement agent for Noble Group. J.P. Morgan Securities (Asia Pacific) Limited acted as financial advisor to CIC.”

read more: Press Release: The Noble Group

Wall Street Journal reports, “The Chinese government’s investment arm is in talks on taking a minority stake in Virginia-based power-plant developer AES Corp., according to people familiar with the matter. The possible purchase is part of a wide-ranging discussion aimed at building an alliance between AES and China Investment Corp., the country’s sovereign wealth fund, with some $300 billion in assets.

The discussions could result in CIC taking a significant stake in AES, which has a market capitalization of about $9.5 billion. A joint venture between the two parties also is under discussion, in which CIC would contribute capital to AES’s plans to develop power plants around the globe, said the people familiar with the matter. These people described the talks as being at a sensitive stage, and said they might not produce a deal.

An AES spokeswoman declined to comment. A spokeswoman for CIC also declined to comment.”

read more: Wall Street Journal

Reuters reports, “Qatar Holding LLC aims to become the largest shareholder in Songbird Estates, owner of much of London’s Canary Wharf office complex, the investment arm of the Qatari wealth fund said late on Friday.

‘Qatar Holding has today announced that following the proposed equity issue and loan repayment by Songbird Estates Plc … it intends to become the largest shareholder in the company,’ the group said in a statement.

Qatar’s sovereign wealth fund on Friday joined China Investment Corporation to subscribe to 275 million pounds ($447.9 million) in preference shares issued by Songbird.”

read more: Reuters

AFP reports, “China’s state sovereign wealth fund has bailed out the heavily indebted majority owner of London’s Canary Wharf, according to the real estate development’s owner. The Financial Times reported that the move by China Investment Corporation (CIC) was its first big investment in Britain. The owners of Canary Wharf, Songbird Estates, said in a statement that CIC would form a consortium with Qatar Holding, the Qatari sovereign wealth fund, and a number of existing investors, to provide more than 800 million pounds in new equity. The money is needed to pay 880 million pounds that Songbird owes to US bank Citigroup.

David Pritchard, the chairman of Songbird, said the deal had saved Songbird from bankruptcy.

“This deal secures the future of Songbird on the best possible basis for our shareholders,” he added.

Qatar will become the largest shareholder in the group with a stake of just below 30 percent with US private investor Simon Glick taking 27 per cent and CIC taking around 19 percent, the Financial Times said. The Canary Wharf development in east London’s Docklands houses the offices of major banks and media and newspaper groups.”

read more: AFP

Economic Observer News states, “The CIC has reached an agreement with the Ministry of Finance (MOF) to treat the ＄200 billion US dollars used to originally finance the company as assets rather than a debt, a source from the CIC told the EO. This means that CIC will no longer be required to make regular interest payments to the state, which will, to some extent, ease the pressure on CIC in terms of payments.

In late 2007, in order to fund CIC, the MOF bought foreign exchange from the central bank paid for by issuing special treasury bonds worth 1.55 trillion yuan (＄226.9 billion) at an annual rate of 4.3 percent. As a result, CIC has been required to pay about 66.65 billion yuan (＄9.76 billion) in interest to the state each year. However, this is about to change and CIC will, like other central state-owned enterprises, likely pay dividends at regular intervals to the state.”

read more: Economic Observer News

Property Wire reports, “An example is Singapore’s sovereign wealth fund, the Government Investment Corporation that recently ran the numbers on a half stake in the $485 million Sydney office tower, 1 Martin Place, owned by two Macquarie Group property funds. Other buyers included private investors from Malaysia, Indonesia and Hong Kong. ‘Most are out of Singapore. There are not many from China, but China Investment Corporation has recently had injected $200 million into the troubled Goodman Group,’ he added. The Korea Investment Corporation was also looking for acquisition opportunities, Brooke said. Last month Woori Investment and Securities, an arm of South Korea’s largest financial company, had looked at Investa Property Group-owned office towers in Sydney and Melbourne for about $600 million.”

read more: Property Wire

According to the Reuters, “China Investment Corp (CIC), the country’s $200 billion sovereign wealth fund, has agreed to buy a 40 percent stake in investment firm CITIC Capital Holdings Ltd, the official China Securities Journal reported on Monday. CIC will buy new shares to be issued by Hong Kong-based CITIC Capital, in which CITIC Pacific and CITIC International Financial Holdings Ltd each hold 50 percent, the newspaper said, citing a letter sent to CITIC Capital investors. It gave no figure for the value of the deal. Both CITIC Pacific and CITIC International are units of CITIC Group, China’s biggest financial conglomerate.”

read more: Reuters

China Investment Corp. has set up its international advisory board, which will have its first meeting soon, Jesse Wang, executive vice president of China’s $200 billion sovereign wealth fund, said Saturday. Wang, who was speaking on the sidelines of the Global Think Tank Summit in Beijing, didn’t elaborate.

Set up in 2007 and capitalized by Beijing, CIC is one of the world’s largest and most widely followed sovereign wealth funds. The board will help advise the young fund on its investment strategy. CIC officials have acknowledged in the past they lack experience in investing, and the fund continues to beef up its operations by hiring more talent and setting up new departments as it expands its investments.

read more: The Wall Street Journal

Press Release states that, “Teck Resources Limited (“Teck”) announced today that China Investment Corporation (”CIC”) has agreed to purchase through a wholly-owned subsidiary 101.3 million Class B subordinate voting shares of Teck for C$17.21 per share. Teck will apply the net proceeds of the transaction to reduce outstanding bank debt. On closing, CIC will indirectly hold approximately 17.5 per cent of Teck’s outstanding Class B subordinate voting shares, representing approximately 17.2 per cent equity and 6.7 per cent voting interests in Teck. Upon completion of the transaction, Teck’s Class A shareholders as a group will hold a 61.8 per cent voting interest in Teck with Temagami Mining Company Ltd. holding a 28.5 per cent voting interest.

Teck President and CEO Don Lindsay said: ‘This transaction will have an immediate and very positive effect on Teck’s balance sheet, and represents an attractive opportunity for Teck to establish a relationship with a major Chinese financial investor, with a deep understanding of China, the world’s largest consumer of our principal products.’”

read more: Press Release

Press release states, “CIC participation in Finance Facility CIC has committed to the Facility on the same terms as those announced to the market on 19 May 2009. To facilitate CIC’s participation, Macquarie Bank and its associates have sold down A$15m of their exposure which combined with CIC’s commitment of A$200m takes the final Facility size to A$485m. The Facility will not be increased in size beyond A$485m. Goodman and CIC have agreed to work in good faith towards a broader relationship between the two groups.

Greg Goodman, Group CEO of Goodman said: ‘We are very pleased with the support shown to the Group by CIC and are excited about the opportunity to partner with an institution of this calibre as we seek to grow our business globally. We view a relationship with CIC as highly strategic and believe that together we can capitalise on the significant opportunities created by current market conditions.’

The key terms of the A$485 million Facility are as follows:

9 month term expiring in February 2010, extendable for a further 15 months; and
Secured facility with covenants comparable to those in Goodman’s existing common
terms deed poll.

In conjunction with the Facility, additional Options will be granted over 255.3 million Goodman stapled securities with a two year term (Options). These additional Options are to be issued with a strike price of $0.40 and the lenders will share the two tranches of Options on a pro rata basis.

Approval from Australia’s Foreign Investment Review Board will be sought in respect of CIC’s participation in the transaction. The issue of options (apart from the first 120 million Options which were issued within placement capacity) will also be subject to security holder approval. In the event that the Options are not approved by security holders, the lenders under the Facility will be entitled to a cash amount from Goodman equivalent to the value of the Options as if they had been granted and were exercised. Further details of this grant will be distributed as part of a notice of extraordinary general meeting.”

read more: Goodman Press Release

Wall Street Journal reports, “Renaissance Technologies founder James Simons this year took steps to retire from his famed hedge-fund firm but has put the plans on hold for now, people familiar with the discussions say. The firm won’t discuss the reasons behind his moves. But Mr. Simons appears increasingly willing to part with at least some control of his hedge-fund firm, one of Wall Street’s most famous, successful and secretive. The 71-year-old executive has traveled to China to talk with officials of the China Investment Corp., the $200 billion sovereign-wealth fund, about selling a multibillion-dollar stake in Renaissance, people with knowledge of the matter said. It isn’t uncommon for leaders of investment-management firms to sell stakes as they approach retirement. The China talks, which took place last year, didn’t lead to a deal, the people said. But this year, a top Renaissance executive told Wall Street associates that the firm could sell a stake, a person outside Renaissance who was involved in the talks said. CIC didn’t respond to a request for comment.”

read more: Wall Street Journal

“June 2nd 2009: Morgan Stanley (MS) announced that it had priced a public offering of common stock for proceeds of approximately US$2.2 billion. The proceeds are intended to fully redeem the TARP preferred capital before the end of June.

In view of the excellent relationship with CIC and the preemptive rights CIC holds, MS notified CIC of the offering. CIC sees this as an opportunity to strengthen its relationship with MS, and it decided to participate in the offering and subscribe $1.2 billion common stock. CIC had existing investments in MS before this transaction. On Dec 19th, 2007,CIC purchased $5.6 billion mandatory convertible securities into MS common stock, representing approximately 9.86% equity ownership in MS. Following Mitsubishi UFJ Financial Group, inc.’s investment in MS in October 2008, CIC’s equity ownership was diluted to approximately 7.68%. This new purchase will bring CIC’s equity ownership in MS back to approximately 9.86%, effectively reducing CIC’s overall cost basis and increasing the returns potential.

MS is a leading global financial service firm providing a wide range of investment banking, securities, investment management and wealth management services. MS is widely expected to be able to leverage on its strengthened financial position and will be on the road of resuming its successful trajectory amid the dramatic restructuring of the international financial services industry.

CIC has further strengthened its relationship with MS through the new investments. CIC remains optimistic in MS’ future growth and progress.”

read more: China Investment Corporation

China is stockpiling commodities such as copper and iron ore as part of a reallocation of its sovereign wealth amid concern that the value of its dollar assets may decline, according to the Royal Bank of Canada. “It’s part of an overall desire to decrease its exposure to dollar assets,” said Brian Jackson, senior strategist at Royal Bank of Canada in Hong Kong, in an interview today. China fears the hundreds of billions of dollars the U.S. is spending on bank bailouts and stimulus will cause “higher inflation and a weaker dollar,” he said.

Premier Wen Jiabao has said he is “worried” about the safety of the nation’s $767.9 billion in holdings of U.S. Treasuries and called on the U.S. “to guarantee the safety of China’s assets.” Central bank Governor Zhou Xiaochuan has proposed a new global currency to reduce reliance on the dollar.

read more: Bloomberg

Shares of China Construction Bank Corporation rose as much as 7.4% Thursday on reports China’s US$ 200 billion sovereign-wealth fund may scoop up part of Bank of America Corp.’s (BAC) stake in the Chinese lender.

China Construction Bank was up 3.2% at HK$4.90 at the midday break on Hong Kong’s stock market, having risen as high as HK$5.10 in the morning session. The benchmark Hang Seng Index was up 0.8% at 16,967.

read more: Wall Street Journal

The New Zealand Herald states, “Prime Minister John Key has revealed China’s US$200 billion ($349 billion) sovereign-wealth fund has signaled its interest in a stake in NZ dairy giant Fonterra if it changes its capital structure. China Investment Corp chief executive Lou Jiwei made the fund’s interest in Fonterra, and other New Zealand assets, clear in a meeting with Key at the Boao Forum for Asia two weeks ago.

But Key stressed it was up to Fonterra’s farmer shareholders to resolve the appropriate capital structure. Sources told the Herald Key’s preference would be for the NZ Superannuation Fund – rather than another nation’s wealth fund – to take a stake in Fonterra. The Prime Minister has made clear to Chinese investors that New Zealand would welcome increased investment particularly in greenfields or co-ventures. Key also met a representative from the Canadian suitor for Auckland International Airport whose successful bid for a 40 per cent stake was overturned when Labour Cabinet ministers changed the overseas investment rules.”

read more: New Zealand Herald

The press release states, “ever since our inception in 2007, CIC’s management team has been committed to improving our corporate governance and investment strategy. Over the past year, we have developed a sound investment management system and a strong professional team. CIC has recently reorganized its investment departments to further improve corporate efficiency, and boost its synergized ability to seize investment opportunities and maximize benefits for its shareholder.

Based on needs and requirements of their different asset classes, target markets, investment approaches, compliance and other factors, CIC has established four new departments, i.e. Public Market Investment Department, Tactical Investment Department, Private Market Investment Department and Special Investments Department, to replace Fixed Income Investment, Equity Investment and Alternative Investment departments.”

read more: CIC

Caijing reports that, “Central Huijin Investment Ltd., an arm of sovereign wealth fund China Investment Corp, will buy a 38% stake in New China Life Insurance Co. from the China Insurance Regulatory Commission (CIRC).

A person close to shareholders of New China Life, China’s fifth-largest insurer, told Caijing that the acquisition was approved by the State Council, China’s cabinet. The person added that the acquisition price will be set after Pricewaterhouse Coopers finishes its audit of New China Life’s 2008 accounts.

Central Huijin is a controlling shareholder in several Chinese financial institutions and is often called upon to restructure those in poor shape. The CIRC took 38 percent in New China Life following a 2007 investigation into alleged fund misuse at the insurer. It paid 2.7 billion yuan, or 5.99 yuan per share for its stake in the unlisted company.”

read more: Caijing

“It’s now a “good opportunity” for the China Investment Corp. (CIC), China’s sovereign wealth fund, to make international investment, said a top CIC official here Wednesday.

‘To some extent, the current international situation gives the CIC a good opportunity,’ said CIC deputy general manager Wang Jianxi, who is also a member of the National Committee of the Chinese People’s Political Consultative Conference (CPPCC), the top political advisory body.

‘The major concern is when and how we should take actions,’ said Wang during a panel discussion of the CPPCC National Committee’s annual session.

As a passive financial investor, the CIC will stick to its initial purpose of increasing the investment proceeds of China’s foreign exchange reserves and “adjust its investment strategies according to market conditions,” said Wang.”

read more: Xinhua

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