China sovereign fund to buy CITIC Cap stake -sources

HONG KONG/SHANGHAI, July 20 (Reuters) - China Investment Corp (CIC), the country's $200 billion sovereign wealth fund, has agreed to invest HK$2 billion ($258.1 million) for a 40 percent stake in private equity fund manager CITIC Capital, sources said on Monday.

CITIC Capital, backed by the powerful CITIC Group, which is directly led by the cabinet, will issue new shares only to CIC, and the deal could help the fund manager boost its capital base to HK$5 billion from the current HK$3 billion, said the sources with direct knowledge of the matter.

Beijing's influential Caijing magazine first reported the alliance between CITIC Capital and CIC at the weekend. Reuters reported in Feburary that CIC was in talks to buy up to half of CITIC Capital. [ID:nHKG22741]

(Reporting by George Chen and Samuel Shen; Editing by Jonathan Hopfner)