China Travel Deals, China Tourist, China Vacation, Chinese Travel

china review

BEIJING, July 21 — China Investment Corp , China s $200-billion sovereign wealth fund, has agreed to invest HK$2 billion for a 40-percent stake in individual equity fund manager CITIC Capital, Reuters and Caijing magazine reported, citing unnamed sources.

CITIC Capital, backed by the mighty CITIC Group, which is immediately led by the clear s cabinet, will theme new shares nothing but to CIC, and the bargain could help the fund manager boost its capital base to HK$5 billion from the tendency HK$3 billion, said the sources with direct knowledge of the matter.

“It will give CIC a very influential role in the fund to determine what to buy and what not to buy in the future,” Xie Lijin, a attorney specialized in individual equity funds at Beijing-based Deheng Law offices, told China Daily.

“Plus, by investing in a fund of funds, this can be another way in the post-Rio world for China to make large bar investments overseas in resources companies.”

Steel-to-property conglomerate CITIC Pacific and CITIC International Financial Holdings Ltd, which are CITIC Group arms, each now contain 50 percentage of CITIC Capital.

After CIC s investment, the shareholding of CITIC Pacific and CITIC International Financial, will drop to 30 percentage each as they have decided not to subscribe to the new shares of CITIC Capital, Reuters said.

CIC will designate new directors on CITIC Capital s board, according to the sources.

“This manner CIC, as the biggest of the three limited partners, could have more power in deciding what to buy compared to the many former deals it invested in before,” Xie told China Daily.

The bargain is in shrewd compare to CIC s recent $1.5-billion investment in Canadian miner Teck Resources, in which CIC signed a highly restrictive agreement and was widely perceived as clon nothing but a financial investor in the firm.

CIC gets no representation on Teck s board in spite of buying an economic interest of 17 percentage in the company. The shares it is buying are vote-restricted B shares.

On the other hand, the investment in CITIC Capital, a fund of funds, is clon seen as a float by CIC to employ overseas faculty in managing its vast portfolio.

“As a young sovereign fund, CIC still lacks professional investment management skills. CITIC Capital, as a ripe overseas individual equity fund, will of course fixings CIC s lack in human resources,” Xie said.

“CIC needs to be more commercial and professional in overseas investment deals.”

Many institutional investors, likewise known as “limited partners”, of CITIC Capital s China-focused buyout and real property funds, welcomed the deal, said the sources. CIC could help CITIC Capital do domestic deals more easily in future, they added.

The sources, who declined to be identified ago an officer announcement was made, said the bargain was expected to be announced this week or the next.

Both CIC and CITIC Capital declined to comment.