KCIC to open first Chinese office

The Kuwaiti investment firm’s first office in Asia aims to establish private equity vehicles and build closer ties with the Chinese government.

Kuwait-based Kuwait China Investment Company (KCIC) is opening its first office in China, which will be operational in 2010.

The firm is currently considering its options in light of China's new policies and regulations for foreign investment companies and anticipates its first office will be in Shanghai. However, it has not ruled out Beijing, according to a KCIC spokesman.

The Chinese office provides KCIC with a platform to set up private equity vehicles to access opportunities in the country. It will also enable KCIC to build closer relationships with Chinese government circles and businesses, Ahmad Al Hamad, a KCIC managing director, said in a statement. The firm will set up a private equity fund from the new office once it has found the right team to support it, the spokesman added.

In Asia, the firm primarily invests in sectors including energy, real estate, agriculture, infrastructure and financial services. In China, it will focus on the country's domestic consumption sectors.

In October, KCIC chief financial officer Faisal Nawaz told Reuters that the firm was planning to buy positions in fund management platforms across China in addition to launching its own funds. The investments in platforms would precede the fund launches so investors could choose from a multitude of projects instead of just one, he reportedly said. At time of press, the firm has not found a suitable target yet, the spokesman said.

At the time, Nawaz said the firm should expect returns of between 15 percent and 19 percent from its investments in the region. The firm’s debut fund, which has yet to be launched, will target $300 million and have a pan-Asian focus, he reportedly stated.

KCIC has previously made a $100 million commitment to a fund of funds vehicle managed by Jade China Value Partners.

Set up in 2005, KCIC’s founding shareholders include Kuwaiti sovereign wealth fund Kuwait Investment Authority, Kuwaiti investment bank National Investment Company, and Middle Eastern conglomerate Al Ghanim Industries. The firm manages more than $450 million in assets and made KWD12 million ($42 million; €28 million) in profits in the first nine months of 2009. It has a 20-strong investment team in Kuwait.