The Beijing Times reports sovereign wealth fund China Investment Corp will suspend investments in overseas financial companies due to high investment risk, citing Wang Jianxi, a CIC executive vice-president, pictured here.

Wang Jianxi said, ‘As sovereign wealth funds have low risk tolerance, investment in overseas financial assets, such as Blackstone and Morgan Stanley , will be suspended.’

He said the CIC had invested less than half of the money it planned to invest abroad. After all planned investments are made, the ratio of high-risk financial assets will be diluted, accounting for a small portion of overall investment.

The CIC paid $3 billion for a 10% stake in the Blackstone Group in May ahead of the private equity group’s initial public offering at $29.605 per share. Those shares, which are still locked up, are now around $15.

Wang Jianxi said the CIC does not pay much attention to short-term price fluctuations as the company has made a long-term financial investment into Blackstone and Morgan Stanley. WHich, given the prices, is just as well.

He added, ‘We can make a gain not only from the stock price. And we can also achieve investment gains from dividends.’ The fund has started to pay interest on bonds issued by the Ministry of Finance to fund its start-up.
Source: CNN Money