CIC loses another private equity official

The $460bn sovereign wealth fund has been experiencing an exodus of alternative investment professionals, many of whom were hired during the fund’s initial launching of its private equity programme.

China Investment Corporation has lost another private equity official as the exodus of the sovereign wealth fund’s original private equity team that came together in 2008 continues.

James Ieong, a managing director with CIC, has resigned, Private Equity International has learned. Ieong has been at CIC since 2008, when he joined the organisation with the first wave of professionals tasked to build the private equity programme. Ieong worked at Credit Suisse as director of distribution in China for asset management prior to joining CIC.

CIC was formed in 2007 by the Chinese government to help diversify the country’s foreign exchange holdings and obtain higher risk-adjusted returns.

The sovereign wealth fund quickly became a major player in private equity as one of the most significant pools of capital in the market. CIC’s initial private equity plan was to commit a large amount of dollars to brand name managers like The Blackstone Group and Apax Partners.

For a few years, CIC committed huge amounts of capital to the asset class, boosting its exposure to alternative investments from 6 percent in 2009 to 21 percent in 2010.

With all this re-shuffling, very quickly you're seeing in the order of magnitude of tens of billions of dollars in the hands of very new people.

Source with knowledge of CIC

However, after a few years of frenetic commitment activity, the organisation began to consider moves into more direct investments and to slow its commitment pace as its portfolio had grown very large, according to a person with knowledge of CIC’s strategy.

Further, the initial generation of investment professionals at CIC signed three-year contracts, and several have opted to not renew with the organisation. Collin Lau, who joined CIC in 2009 to head up real estate investments and became head of European private equity, decided to resign earlier this year. Another investment official, Patrick Wu, who took over the real estate programme from Lau, also decided to leave.

Xiaoqing Bai, who is in charge of the North American private equity focus, took over the reins of the global real estate portfolio from Wu. Bai formerly worked as a spokesperson for CIC. Olivia Ouyang, who leads the fund’s emerging markets focus, has taken over responsibility for European private equity. Winston Ma, one of the earliest members of the initial class of investment professionals, remains with the organisation and was moved to Canada to work on CIC’s efforts to build up exposure to direct investments.

While the exodus of investment officials is unlikely to change the fund’s strategy, one concern is that many of the professionals who helped build the private equity programme from the beginning are no longer there. With new employees in place, some “institutional knowledge” about the programme may have been lost, according to the person.

“With all this re-shuffling, very quickly you’re seeing in the order of magnitude of tens of billions of dollars in the hands of very new people,” the person said. “It’s a very big shift; many of the people today in the private equity department would not remember all the history around the first generation investments.”

CIC could not be reached by press time.