China's CIC to buy U.S. mortgages; sources

HONG KONG (Reuters) - China Investment Corp (CIC), the country's $200 billion sovereign wealth fund, is set to pour up to $2 billion soon into the U.S. mortgage system by hiring mandates under the U.S. Treasury-backed Public-Private Investment Plan (PPIP), sources told Reuters.

Under the PPIP program launched earlier this year the U.S. government plans to seed a number of public-private investment funds that would combine taxpayer money with private capital to buy as much as $40 billion in toxic securities from banks.

The firms in talks with CIC are designated PPIP managers and include Alliance Bernstein LP, with sub-advisers Greenfield Partners LLC and Rialto Capital Management LLC; Angelo Gordon and Co LP with GE Capital Real Estate; BlackRock Inc; Invesco Ltd; Marathon Asset Management LP; Oaktree Capital Management LP; RLJ Western Asset Management LP; Trust Company of the West; and Wellington Management Co LLP, said the sources.

CIC has yet to select any firms as mandates but is expected to make a decision before the end of August, said the sources with direct knowledge of the matter.

The sources declined to be identified as the negotiations are private and confidential. CIC declined to comment.

CIC, established by the Communist government in late 2007, is keen to participate in the PPIP as it expects the U.S. property market to start to recover gradually late this year, said the sources.

(Reporting by George Chen; Editing by Jonathan Hopfner)