CIC-change

19 June 2009 By John Foley Follow @johnsfoley

China s sovereign fund snubbed Western financials last year. Yet Morgan Stanley, BlackRock and maybe even Blackstone are all beneficiaries of an apparent uturn. CIC might be calling the bottom or just beginning to act like a less politicised investor.

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China Investment Corporation may invest $500m into hedge funds managed by Blackstone, the private equity and advisory business, the Wall Street Journal reported. China's sovereign wealth fund already owns a stake in Blackstone directly, after taking a 10% holding before the US firm's flotation in 2007.

CIC topped up its $5.6bn investment in Morgan Stanley earlier this month, buying $1.2bn of common shares. It also paid $160m as part of a financing facility for Goodman Trust, an Australian property investment firm.

The fund lost money on several highprofile investments when the markets fell heavily in 2008, including its stakes in Morgan Stanley and Blackstone. Chairman Lou Jiwei said in December he didn't dare to invest in financial assets, for fear of how they would be affected by governments' policies.

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