Avid private equity investor China Investment Corporation has hired vice-mayor of Shanghai Guang Shao Tu as chairman of the sovereign wealth fund, according to reports from Chinese media. Tu replaces previous chairman Jiwei Lou who was transferred to the ministry of finance.
Reuters quoted a source saying the organisation will announce the high-level changes shortly.
Tu joins CIC as its relationship with the United Kingdom turns sour. British media reported in early May that the Chinese investor had withheld funds intended to finance infrastructure projects in the UK, including a planned high-speed rail network, due to prime minister David Cameron's meeting with the Dalai Lama last year.
CIC has actively invested in the UK’s infrastructure, including the development of Canary Wharf and Thames Water. acquired a 10 percent stake in Heathrow Airport Holdings (HAH), the UK airports operator formerly known as BAA, Private Equity International reported earlier.
The Chinese fund bought a 5.72 percent stake in HAH from Spanish developer Ferrovial – HAH’s largest shareholder – for £257.4 million (€321.2 million; $416 million) and a further 4.28 percent from other unnamed shareholders in HAH for £192.6 million.
China Investment Corporation has $500 billion in assets under management and is in charge of managing part of China’s foreign exchange reserves. The firm has an 8.4 percent allocation to alternative assets and a 2.3 percent allocation to private equity.
The firm's private equity team has experienced high turnover in recent years. Daniel Hu, a director with the private equity team at CIC, resigned from the organisation in May last year, PEI reported earlier. Hu was among a number of resignations from CIC's private equity team. The original team – the employees who started in 2008 and helped build its portfolio today — have for the most part departed, opting not to renew their three-year contracts.