China Investment Corporation (CIC) delivered a benchmark-beating return in 2023 on the back of putting greater emphasis on private assets such as private credits and green energy investments.
CIC posted 6.57% of ten-year annualised net return as of year-end 2023, outperforming its long-term performance benchmark by 31 basis points, the sovereign wealth fund says in its annual report.
The fund’s cumulative annualised net return was 6.23% since its inception in 2007.
CIC says the global macroeconomic paradigm shift continued to evolve in 2023 with the impact of high interest rates and inflation on market pricing.
Meanwhile, the fluctuations in the global bond and equity markets heightened challenges in risk diversification and alpha generation for the fund’s portfolio.
“In this volatile environment, CIC maintained its strategic focus as a long-term institutional investor while prudently navigating the macro paradigm shift,” the report adds.
On strategic allocation, CIC emphasises the fund maintains a balanced approach with comparable allocation to public and private markets.
As for private markets, CIC plans to focus more on renewable energy and private credit, while exploring opportunities in emerging markets.
“In private credit, we conducted in-depth market analysis to capitalise on opportunities in the high-interest rate environment, strengthening our private credit investments and optimising portfolio allocation,” it says.
As for renewable energy, CIC says it is raising its exposure to energy transition and forging green energy partnerships with external managers.
The wealth fund is also exploring new technology opportunities such as artificial intelligence.
“Recent breakthroughs in mobile technology, big data, supercomputing, sensor networks, and neuroscience have accelerated the development and application of AI technology,” it says. “At CIC, we are closely monitoring AI-related investment opportunities. We are strengthening our collaborations with top-tier investment managers and tracking industry trends.”
CIC, which oversees the country’s foreign exchange reserves, had US$1.33 trillion of total assets as at end 2023.
