Company News

UPDATE 1-China's CIC wants to bid in Russia privatisations

* Western markets heavily regulated, growth shaky - CIC VP

* Looking at emerging markets in Europe, Asia, Africa

* Interested in investing in agriculture

* Targets dividends in Russia, says 5-6 percent of profit OK

(Combines series, adds quotes, background on privatisation)

By Gleb Bryanski

MOSCOW, Oct 5 (Reuters) - China Investment Corp would like to bid for Russian state assets in a sale that is expected to raise $50 billion, as the fund shifts focus to emerging markets, a CIC vice president said on Tuesday.

“We would like to take part in privatisation,” Jesse Wang, executive vice president at the $300 billion sovereign wealth fund, said on a visit to Moscow.

Finance Minister Alexei Kudrin told the Reuters Russia Investment Summit last month that Russia was preparing to sell $10 billion worth of assets per year for approximately five years. Some of Russia’s top blue chips will go under the hammer. [ID:nLDE68E1UF]

The government is currently holding active discussions with potential bidders. Wang said that apart from the energy sector the fund was interested in agriculture and the financial and power sectors.

“We think that in the long run agriculture is a good business for investment,” Wang said, citing an international shortage of land and climate change as reasons. “We are thinking about this as our emphasis.”

The state agricultural machinery leasing firm Rosagrolizing is the only firm from the sector on the privatisation list. Wang said CIC was “open” to looking at any company from the list.

Wang said sovereign wealth funds were playing a more active role. He said SWFs assets will reach $12 trillion in 10 years, eclipsing the value of hedge funds and private equity funds.

He added that the CIC found developed markets too heavily regulated and was steering investment towards emerging markets.

“We have so far held a larger portion of our investments in Western countries, but we have found out that there are a lot of restrictions and their economies are struggling,” Wang said.

“Therefore we are considering being more active in emerging markets including Russia, Eastern Europe, Africa, and Asia.”

In Russia it is looking at companies which pay 5-6 percent of their net profit as dividends, a vice president said on Tuesday, complaining that many Russian companies did not pay dividends.

“Five-six percent is OK if it is a stable company with little risk,” Jasse Wang said, adding it could achieve 10-15 percent in higher-margin sectors.

Wang said the fund was a passive investor and did not seek a role in corporate management but it needed to ensure that Russia had a good investment climate and was ready to protect the rights of minority shareholders.

“We have no geopolitical goals or strategic purposes. However, we are profit-driven,” Wang said. (Reporting by Gleb Bryanski; writing by Melissa Akin; Editing by Hugh Lawson)