* CIC posts 11.7 pct return for second year in 2010
* CIC made $33.5 bln in fresh investments, slashed cash
* Boosts equity, alternative investments
(Adds more details)
BEIJING/SHANGHAI, July 26 China Investment Corp
(CIC), the country's $300 billion sovereign wealth fund, said it
was cautiously optimistic about its investment outlook this
year, after posting a 11.7 percent return on offshore
investments for the second year in 2010.
The robust performance, achieved last year as CIC
boosted overseas investment by $35.7 billion while nearly
depleting its cash holdings, could bolster its case to win
additional government funding.
"The international investment environment is getting more
complicated, and there's great uncertainties towards sustained
global recovery and growth," CIC Chairman Lou Jiwei said in the
fund's 2010 annual report on Tuesday, citing factors such as the
eurozone crisis and surging commodities prices.
"We're prudently optimistic about 2011. The global economy
will continue to recover, but future path will be not even."
CIC, which was set up in 2007 with a mandate to diversify
part of China's foreign currency reserves into riskier overseas
assets, has repeatedly called for fresh capital injection from
the government as it stepped up investment immediately after the
2007-2008 financial crisis.
CIC made $35.7 billion in fresh offshore investment last
year, after adding $58 billion in 2009. Its overseas portfolio,
including cash, totalled $135.1 billion at the end of last year.
Reflecting stronger appetite for riskier assets, CIC raised
its equity investment to 48 percent of its portfolio from 36
percent in 2009, while increasing the portion of alternative
investments, which include real estate and commodities, to 21
percent from 6 percent.
In contrast, CIC slashed its cash holdings to 4 percent of
the portfolio from 32 percent a year earlier, while the
proportion of fixed income investment rose to 27 percent from 26
(Reporting by Langi Chiang and Kevin Yao in Beijing, Samuel
Shen in Shanghai; Editing by Kazunori Takada)