China Investment Corporation, the world’s second-biggest biggest sovereign wealth fund, is upping its stakes in the US on a wider scale with a reported partnership with Goldman Sachs for a $5 billion private equity fund.
CIC has been busy acquiring infrastructure and resources assets globally, and the fund – which will target US-based manufacturing assets – shows the investor is ready to expand its holdings to more than just publicly traded securities, real estate and private equity.
Details of the fund are under negotiation and are expected to be announced on Thursday during President Donald Trump’s visit to Beijing.
CIC has around $813.5 billion in assets under management, according to the Sovereign Wealth Fund Institute.
The investor signalled in May that investment in the US was a key focus when it moved its North American outpost to New York from Toronto. The move is also in line with former chairman and chief executive Ding Xuedong’s announcement in January that it would ramp up its investments in US property and infrastructure in order to “better manage global uncertainties by maintaining a diversified portfolio”.
Ding also highlighted in the fund’s latest annual report that it will seek to increase its alternative investments via its direct investment platform, CIC Capital Corporation.
Alternative assets accounted for 37 percent of CIC’s overall portfolio at the end of last year and generated “satisfactory diversification effect and higher long-term expected returns”, the investor said in the report.