China's CIC gives breakdown of U.S. equity stakes

BEIJING Tue Feb 9, 2010 6:41am EST

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BEIJING (Reuters) - China Investment Corp CIC.UL, the country's $300 billion sovereign wealth fund, has made its biggest U.S. equity bets in natural resources and financial stocks.

A filing with the U.S. Securities and Exchange Commission detailed equity holdings in U.S. listed companies and funds worth $9.63 billion at the end of 2009.

About a quarter of the investments are in exchange-traded funds, giving CIC exposure to markets in Europe, Asia and emerging markets at a low cost.

Among other ETF stakes, CIC said it had $78.6 million in U.S. Oil Fund, $155.6 million in SPDR Gold Trust and $116.4 million in Market Vectors, also a gold fund.

It also disclosed small stakes in gold miners AngloGold Ashanti Ltd (ANGJ.J) and Kinross Gold (K.TO) as well as energy firms Chesapeake Energy Corp (CHK.N), Andarko Petroleum Corp (APC.N), Valero Energy Corp (VLO.N) and Tesoro Corp (TSO.N)

The filing, made last Friday, is not exhaustive. It does not include investments entrusted to outside fund managers or CIC's stake in private equity house Blackstone (BX.N).

CIC paid $3 billion for a 10 percent stake in Blackstone in 2007, before it was formally set up, and bought more shares in 2008.

The biggest holding listed in the SEC filing, worth $3.54 billion, was in Canadian miner Teck Resources Ltd (TCKb.TO).

Among U.S. holdings, CIC declared a stake of $1.77 billion in Morgan Stanley (MS.N) and a previously unannounced $713.8 million holding in BlackRock Inc (BLK.N), the world's largest independent money manager.

CIC disclosed stakes, mostly small, in more than 60 companies, including:

-- $498 million in the U.S.-traded stock of Brazilian miner Vale SA (VALE5.SA);

-- $29.8 million in Citigroup (C.N);

-- $19.9 million in Bank of America Corp (BAC.N);

-- $14.7 million in American International Group Inc (AIG.N);

-- $9 million in Coca Cola Co (KO.N);

-- $6.3 million in Apple Inc (AAPL.O);

-- $4.1 million in News Corp (NWSA.O).

For CIC's filing, click here CIC has made no secret of its ambitions to develop its own investment expertise so it can manage more of its money by itself, cutting down on fees in the process.

Lou Jiwei, the chairman of CIC, said the fund would manage more of its investments in developed markets internally this year and steadily accelerate its overseas investments, the China Securities Journal reported.

"As of now, most of CIC's overseas funds are managed by outside portfolio managers, but we will gradually increase in-house investment in more efficient developed markets in the future," the newspaper paraphrased Lou as saying in an article he published on Monday. It did not say where the article appeared.

CIC has been investing intensively in resources and commodities since 2009, mainly because there is still plenty of room for price gains in those sectors, Lou said.

CIC also needed to hedge against the risk of inflation as the world economy picked up, he added.

Lou restated CIC's policy to operate the fund as a financial investor seeking to maximize its returns, not to control the companies in which it invests.

(Reporting by Aileen Wang and Alan Wheatley; Editing by Clarence Fernandez)

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