China sovereign fund CIC profit soars on record overseas returns

SHANGHAI/BEIJING (Reuters) - China’s sovereign wealth fund China Investment Corp (CIC) posted a 37.55 percent rise in 2017 net profit, boosted by record-high returns from its overseas portfolio.

Profit rose to $103.62 billion from $75.34 billion a year ago for CIC, a shareholder in China's largest banks such as China Development Bank Corp [CNDBKH.UL] as well as Industrial and Commercial Bank of China Ltd 601398.SS1398.HK.

CIC’s total investment income was $114.46 billion, versus $83.03 billion in 2016, its 2017 report showed on Monday.

It reported a 17.59 percent net return on its overseas investments, an all-time high, versus 6.22 percent in 2016.

CIC [CIC.UL] invests overseas through two units, CIC International Co and direct investment vehicle CIC Capital Corp. The latter, in 2017, made 20 overseas investment decisions with a total committed investment figure of $3.8 billion.

The wealth fund hopes to invest more in U.S. markets, CIC President Tu Guangshao said at a press conference in Beijing, adding that concerns about any impact on the fund’s investment plans from mounting trade tensions between the countries was “totally unnecessary”.

Offshore strength pushed the fund’s annualized accumulative investment return for the 2007 to 2017 period to 5.94 percent, exceeding the fund’s performance review target, CIC said.

Headquartered in Beijing, CIC was founded in 2007 to help China earn a higher return on its foreign exchange reserves.

In the past, CIC has invested in several overseas companies ranging from online property rental firm Airbnb, Canadian mining company Teck Resources TECKb.TO to U.S. private equity house Blackstone BX.N.

CIC, however, sold its equity holding in Blackstone in March, exiting from an 11-year old investment.

Through its Central Huijin Investment Ltd subsidiary, CIC is a shareholder in 17 Chinese state-owned financial institutions, including China Construction Bank Corp 601939.SS0939.HK and Agricultural Bank of China Ltd 601288.SS1288.HK.

Reporting by Xiaochong Zhang, Engen Tham, Shu Zhang; Editing by Himani Sarkar