CIC makes Heathrow landing
02 November 2012
News, Asia, China, United Kingdom
By Hui Ching-hoo
China’s sovereign wealth fund (SWF) China Investment Corporation (CIC) announced on Thursday (November 1) that it had purchased a 10% stake in London’s Heathrow Airport for an undisclosed amount.
Fangyu Fei, vice-president of China Academy of Financial Research at Shanghai Jiao Tong University, tells Asia Asset Management that China’s SWFs are sitting on an enormous amount of foreign reserves. The Chinese SWFs are stepping up their exposure to foreign assets just now because valuations are appealing and the assets available offer the portfolios a lot of diversification. “The increase in foreign investment can also help them to forge a connection with the global market,” he adds.
The deal comes ten months after CIC bought 8.68% of the entity behind UK utility group Thames Water.
Up to the end of 2011, CIC had total assets of US$482 billion.
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