Fund managers hope to help CIC invest in global stocks

CHINA Investment Corp, the nation's US$200 billion sovereign wealth fund, has received more than 100 applications from money managers to help it invest in global equity markets, a person involved in the selection process said.

Beijing-based CIC, Asia's largest sovereign fund, is taking applications until January 15. It will notify institutions directly after the deadline expires about whether they've been selected, the person said, declining to be identified before a public announcement.

"The potential for global fund managers is huge since CIC has a lot of appetite for foreign expertise," said Anny Wong, who helps run institutional sales at BOCI-Prudential Asset Management, which oversees about US$5 billion and has submitted an application to CIC. "We're looking for CIC to be one of our most important clients."

CIC spent more than US$8 billion last year purchasing stakes in Morgan Stanley, the second-biggest US securities firm, and Blackstone Group LP, manager of the world's largest buyout fund. The four-month-old fund may step up overseas investments this year as China encourages capital outflows to limit domestic asset price bubbles and inflation, Bloomberg News said.

The Government of Singapore Investment Corp, which manages more than US$100 billion of that nation's reserves, hires outside firms to run some of its funds. Temasek Holdings Pte, which oversees an additional US$112 billion on behalf of the city-state, uses only its own fund managers.

Bai Xiaoqing, an official at CIC's communications office in Beijing, declined to comment.

Firms were invited in December to apply for the chance to invest CIC assets in stocks on the MSCI All Country Index, MSCI EAFE Index, MSCI Emerging Markets Index and in Asia ex-Japan equities. They must have at least US$5 billion of assets under management to be eligible, the sovereign fund said in a December 12 statement.

"CIC will likely focus on index funds and investments with quantitative strategies," said Howard Wang, who oversees US$14 billion at JF Asset Management Ltd in Hong Kong. "It'll take a conservative approach to save powder for other government goals, such as injecting money into Chinese banks."

Wang declined to say whether his firm has applied to CIC.

CIC will inject US$20 billion into China Development Bank, which funds the country's public works projects, as the government nears the end of its decade-long restructuring of the banking industry.