China CIC made small overseas loss in '08-chairman

BEIJING, March 31 (Reuters) - China's sovereign wealth fund booked "small losses" in its overseas investments in 2008, but it has outperformed other sovereign funds, its chairman said in an article published in the latest edition of Caijing magazine.

Lou Jiwei, chairman of China Investment Corp (CIC), said that the $200 billion fund had adjusted its investment strategy last year by reducing stock exposure and increasing cash positions, so it had avoided "big risks and losses".

"Generally speaking, CIC has booked small losses in its external investments in 2008, but its financial position remained sound and it has basically achieved the targets set by the board of directors in early 2008," Lou said.

"(CIC's) financial performance is far better than other sovereign wealth funds in the world," Lou said.

A source told Reuters earlier that the fund had made about $10 billion profit last year, realising an overall return ratio of 5 percent from both domestic and overseas investments [ID:nPEK105868].

About half of CIC's money is tied up in Central Huijin, a financial company that holds the state's stakes in nine big banks and brokerages; the other half is invested overseas with about $90 billion or so in cash and the remainder in the form of equity stakes in firms including Blackstone (BX.N) and Morgan Stanley (MS.N).

CIC was created in 2007 to manage part of China's foreign exchange reserves for higher returns, and the fund has not published any official financial statements.

Norway's sovereign wealth fund, the Government Pension Fund, reported a negative 23.3 percent return in 2008, ravaged by the global crisis.

(Reporting by Zhou Xin, Editing by Jacqueline Wong)