China’s $813.5 billion sovereign wealth fund posted a 6.22 percent return on its overseas investments last year, rebounding from a loss the previous year as global stocks rallied.
The return compared to a 2.96 percent decline in 2015 when commodity prices sank, Beijing-based China Investment Corp. said in its 2016 annual report released Tuesday. The gain was in line with what Chief Risk Officer Zhao Haiying said in March was a level “close to” 6 percent. Net income, which also includes profit from stakes in China’s biggest banks, rose to $75.3 billion from $73.9 billion.
Returns for sovereign funds have rebounded as global stocks rallied. Japan’s Government Pension Investment Fund, the world’s biggest pension fund, returned 5.9 percent in the year ended March 31, recovering from its worst performance since the global financial crisis. Singaporean sovereign wealth fund GIC Pte said Monday its nominal five-year annualized return in U.S. dollars climbed to 5.1 percent from 3.7 percent.
CIC, currently led by President Tu Guangshao after Chairman Ding Xuedong returned to the State Council in February, is boosting investments in private equity, real estate and hedge funds to diversify from listed companies and pursue returns above market averages, company executives said earlier this year.
CIC’s accelerated its push into alternative investments last month, when it agreed to buy Blackstone’s European logistics property business Logicor for $13.8 billion, its largest deal. Realtor Knight Frank called the transaction a “wise investment” that can tap into demand expected from China’s Belt-and-Road initiative, which runs through much of Europe.
Cash and bank deposits fell to $8.8 billion as of Dec. 31, down from $19.3 billion a year earlier, the company said.
— With assistance by Dingmin Zhang