The recent news in the Financial Times about State Administration of Foreign Exchange's (SAFE)  investments has proved rather interesting. While the news of SAFE's diversification program into equities is nothing new, the fact that SAFE has lost over $80 billion as a result of this program is quite shocking. SAFE has lost more money than all the other Sovereign Wealth Funds in the past 12 months as a result of the economic crisis. If the FT's estimate is correct, then SAFE has lost more than $76 billion more than the China Investment Corporation has.  But SAFE has not suffered from public outrage as the CIC did when it lost $4 billion as a result of its investments in Blackstone and Merrill Lynch. The outrage with the losses by SAFE has been non-existent. Compare this to the CIC's investment in Blackstone, which lost about 30% over a few months after the CIC took the $3 billion stake in May 2008. Lou Jiwei, Chairman of the CIC took on most of the criticism by suffering a humiliating lack of votes as alternate member of China's Central Committee.

The CIC was created to make more risky trades then SAFE.  SAFE's goal is to manage China's reserve currency. SAFE has done this by investing in extremely safe United States treasury bonds and other government bonds.   SAFE has also invested in hundreds of companies with stakes ranging between 1% to 2%. However, over the last year, the CIC has done little, while SAFE jumped into the equity market with reckless abandon. The results are clear; the CIC hasn't lost much, while SAFE has suffered terribly.  The CIC was lucky in 2008. They were able to avoid the blowup at Reserve Primary Fund by mere hours. If they didn't the CIC would have lost all of its $5.4 billion investment. So far SAFE has been lucky too, not by the fact that it lost so much money, but by the fact that nobody in China has really noticed.

15 investments out of the 400 or so investments made by SAFE have become public. Compare this to the estimated 3000 investments that the Abu Dhabi Investment Authority has made of which about one third have become public.