UPDATE 1-China's CIC looks at Apax investment -source

* Looking to be a cornerstone investor - source

* Adds Apax clients may switch 800 mln euros in commitments

* CIC eyes 2.3 pct stake in co that runs Apax funds -source

* Apax declines comment, CIC unavailable for comment

(Recasts, adds detail)

LONDON, Dec 3 (Reuters) - Sovereign wealth fund China Investment Corp is looking to become a cornerstone investor in buyout firm Apax Partners [APAX.UL], a source familiar with the process said, allowing cash-strapped investors to exit.

Under the terms of the deal on the table, Apax is giving its investors in its latest buyout fund the option of transferring up to 800 million euros ($1.2 billion) of commitments to CIC, the source said.

At the same time, the Chinese sovereign wealth fund intends to buy a 2.3 percent stake in the company that manages Apax’s buyout funds.

Apax declined to comment, while CIC was unavailable for comment.

The deal could entice investors who have over-committed themselves to the asset class and fear they will have insufficient cash when private equity houses start to call on commitments to pay for new deals.

The deal is contingent on CIC securing at least 350 million euros of these unfunded commitments, the source said.

Apax last year agreed deals to sell 7.7 percent in the company which manages the buy-out funds to GIC and Future Fund, the Singapore and Australian sovereign wealth funds.

The sale of a stake to CIC will take Apax to its target of 10 percent, with the money raised allowing the firm to invest more of its own capital in future buyout funds alongside its investors, ensuring a tighter alignment of interest, the source said.

The $300 billion Chinese fund has been on an investment spree this year, concentrating mainly on the energy and commodities sectors after high-profile financial sector investments in Blackstone and Morgan Stanley left it with deep paper losses when the global financial crisis struck. (Reporting by Simon Meads and Simon Rabinovitch; Editing by Douwe Miedema, Alan Wheatley and Simon Jessop) ((; +44 20 7542 9969; Reuters Messaging: