CIC restructures

China’s $200bn sovereign wealth fund has reportedly set up a new private equity department and appointed Hu Bing as its new head.

China Investment Corporation (CIC) has reorganised its investment departments to improve corporate efficiency and investment performance. 

Four new departments have been established: the public market investment department, tactical investment department, private market investment department and special investments department, according to a statement on CIC's website.

These will replace three former departments: fixed income investment, equity investment and alternative investment departments.

A new private equity department has also been established and Hu Bing, who was previously responsible for CIC’s fixed income investment and trading activities, has been appointed as its new head, according to Reuters.

Before this, CIC’s private equity business was part of its alternative investments department, which included direct private equity and real estate investments as well.

The head of CIC’s alternative investments is Zhou Yuan, the former China head of investment bank UBS. Zhou, who will reportedly remain in his present position, was appointed to the post in December 2008.

“It is a surprise to many people in the industry as Zhou took his current job not too long ago and private equity is certainly a very important part of alternative investment business to any financial firm,” a source reportedly told Reuters.

“But this also shows CIC really cares about the private equity sector as Hu, now as head of the new and separate department, has more power and confidence when talking to foreign funds for cooperation,” added the source.

Hu joined from China Securities Regulatory Commission and has previously worked in Lehman Brothers, in New York. Zhou and Hu report to the executive committee, headed by Lou Jiwei and Gao Xiqing,
respectively CIC’s chairman and president, a source reportedly said.

CIC is presently building up its team across all investment categories. It has 13 positions on offer available across 11 categories including alternative investments, equity investments and fixed income according to its website.

This April, the Chinese sovereign wealth fund reportedly committed $800 million to Morgan Stanley Real Estate Fund VII Global, the bank’s latest global property fund. In February, CIC reportedly made an investment of $4 billion in US buyout firm JC Flowers' latest fund.

In November 2008, CIC increased its stake in global alternatives manager The Blackstone Group.