China Investment Corporation's timeline
From Taighde
Contents |
Winter/Spring 2007
February 2007: The debate on the nature of what form this new fund will take rages on. One proposal called for the establishment of two different institutions with equal ministerial rank. One would be responsible for overseas investment, headed by Lou Jiwei. The other institution would invest in domestic areas. This proposed institution would be headed by Xie Ping, chairman of Central Huijin Investment Corporation.
March 5, 2007: Lou Jiwei, vice-minister of finance stepped down from his position and took a new position as deputy-secretary general of China's State Council. He was put in charge of a team tasked with drawing up plans for a new investment vehicle, which would become CIC.
March 9, 2007: Jin Renqing, China’s finance minister gave the first official confirmation that China was actively looking for a way to manage their foreign reserves. Jin said this during the China's National People's Congress in Beijing. "The State Council has already made research into separating the management of normal foreign exchange reserves and a portion allocated for investment, this company is now under construction."
The fund is temporary named "Lianhui" in internal discussions of the fund.
March 11, 2007: Zhou Xiaochuan, President of the People's Bank of China, confirmed that Lou Jiwei would head the new organization. He was speaking to reporters at a press conference.
March 15, 2007: The first meeting was held on the planned investment fund. The meeting was attended by senior officials from key economic ministries and regulators Thursday. They discussed the arrangements, orientation and structure of the planned company. Lou Jiwei headed the meeting.
According to a report in China Business News, “the committee has introduced a June deadline for all related departments to submit written proposals on the vehicle's investment strategy, management, legal issues, personnel and the fate of Central Huijin, the People's Bank of China-owned holding company which is expected to play a part in the overhaul of the country's reserve management regime.”
March 23, 2007: Lou Jiewi spoke with several experts on the creation of the investment fund. The experts were Li Yang of Chinese Academy of Social Sciences, Xia Bin of the Development Research Center of State Council, Zhang Shuguang with Tianze Economic Research Center, Ding Zhijie of the University of International Business and Economics and Lu Lei from Guangdong University of Finance.
May 16, 2007: Ding Zhijie, one of the advisors to the fund, announced that the transfer of the foreign exchange will be gradual. He also said that special bonds would be issued by the Ministry of Finance to fund the new entity. He also confirmed that the fund would be established with $200 billion. It appears he was the first to use the term China Investment Corporation to describe the new investment fund.
May 17, 2007: The committee to establish the fund met again. According to the China Business News, “A source was cited as saying the panel had `reached a consensus' and will submit its ideas to the State Council `’for further review.’”
May 19, 2007: The Hong Kong Standard Newspaper wrote the first rumors of a relationship between Blackstone Group and the fund. The newspaper printed that the relationship would entail the fund giving Blackstone money to manage rather than invest.
May 20, 2007: The fund made its first investment in the Blackstone Group. Blackstone released a statement announcing that the fund will take a $3 billion stake in Blackstone’s IPO. Under the terms of the agreement, the Chinese investment company will own no more than a 10 percent interest. The fund also agreed that it would hold the stake for a minimum of 4 years. It can also not invest in any other private equity firms for one year. At the time the fund was named State Investment Company. The Central Huijin Investment Corporation completed the sale.
Summer 2007
June, 2007: The State Council approved the creation of the China Investment Corporation. It also said that it would issue a bond sale of 1.55 trillion Yuan to pay for the funding of the CIC.
July 9, 2007: Wang Jianxi, the Deputy General Manager of the CIC, held a press conference and publicly damped down expectations of a September launch. In his comments, he made several mentions of delays caused by unnamed sources.
July 14, 2007: The People’s Bank of China bought a 0.46% stake in BG Group, a British natural gas company. The price paid is unknown but it is most likely around £125 million. It was assumed that PBoC bought the stake on behalf of the CIC.
August 28, 2007: China's Ministry of Finance issued the first bond sale to be issued to the China Investment Corporation. The first sale involved 600 billion Yuan ($75 billion), which was to be transferred to the PBOC though the Agriculture Bank of China. These bonds will pay for the Central Huijin Investment Corporation, which will then be transferred to the China Investment Corporation. The bonds have a 10-year maturity and will yield about 4.3%.
Fall 2007
September 28, 2007: The China Investment Corporation was officially launched in a low-key ceremony.
Lou said in a speech at the event, "The company will focus on overseas financial products to diversify investment and improve investment returns. Second is to inject capital into domestic financial institutions ... (to) increase the value of state-owned financial assets. " He also said “At the current stage, the company's investment will be focused on financial portfolios, trying to improve long-term investment returns while keeping risks in an acceptable range. ”
October 16, 2007: Lou gave a press conference at the sidelines of the 17th National Congress of the Communist Party of China. During this conference, he said that the CIC will invest in all markets worldwide except those with the settlement of exchange in Yuan. This would include Hong Kong and Taiwan. He also confirmed that the Central Huijin had been bought for $67 billion.
November 8, 2007: Li Yong, Vice Finance Minister and non-executive Director of the CIC, announced that the CIC will only have 1/3 of total assets to invest in overseas companies. He expressed for the first time publically that the CIC will use funds to replenish two Chinese Banks, China Development Bank and the Agricultural Bank of China. He also said that the CIC would not invest in oil, airline or telecommunications companies.
November 28, 2007: Lou Jiwei, at a conference, spoke at length on the CIC. Many notable aspects came out then. Lou said the CIC "wants to be a force in maintaining market stability." Lou went on to say "there is a limit to transparency… If we were to let everyone know our position, we'd be dead.” Marketplace writes “Lou said that the bulk of the CIC's funds will be invested in publicly-traded products, with a small portion to be invested in alternative products. He ruled out investment in infrastructure projects because cash flows aren't immediate enough. Lou noted that the CIC has been given some flexibility in its investment options thanks to its Huijin purchase. .. Lou said that the strong returns on these bank stakes have given the CIC flexibility in its investing practices. ’Without Huijin, the CIC would only be able to invest in fixed income products,’ he said. ‘Even though we can't sell the Huijin stakes, its returns allow us to be more active in asset allocation.’” He also said, "The pressure's too large. I'd rather have started with $20 billion and gradually expand it to $200 billion." Lou also admitted that the fund had to make a profit of 300 million Yuan every day to break even.
December 13, 2007: CIC posted an application for external investment managers. The applications are due by January 15, 2008. It is expected that accepted funds will be notified sometime in February 2008. In November, CIC started looking for employees in China. It is expected that the number of staff will be around 100 people.
December 19, 2007: CIC makes its largest foreign investments to date. It takes a $5 billion stake in Morgan Stanley. The investment is in equity units that will convert to 9.95 of common shares at maturity. CIC will earn 9% interest on these equity units. The units will mature on August 17, 2010.
2008
January 15, 2008: Applications for external managers are due. It is believed that over 100 funds submitted applications.
March 6, 2008: The CIC suspended overseas investments in financial firms. Jesse Wang Jianxi said that "since sovereign wealth funds characteristically have low risk tolerance, investments in overseas financial assets, such as Blackstone and Morgan Stanley, will be suspended in the future,"
March 18, 2008: According to press accounts, the CIC invested in Visa, an American credit card issuer. It is believed that the CIC, rather then the State Administration of Foreign Exchange took the stake. There was a rumor that SAFE was the buyer of the stake but that was disapproved later in regulatory documents.
April 7, 2008 : The CIC teamed up with JC Flowers & Company to form a joint venture fund to invest in various sectors. The fund will initially contain $4 billion. The CIC is expected to contribute around $3.2 billion for an 80% stake, while J.C. Flowers is expected to contribute $800 million for a 20% stake. Although CIC will not be involved in the regular management, it will be briefed ahead of significant investments.
September 2008 - Hu Huaibang, Chairman of the Board of Supervisors, leaves to become Chairman of the Bank of Communications. He is the first senior member of the CIC to leave.
September 24, 2008 - Central Huijin starts purchasing more shares of Chinese banks to show up their share price after CSI 300 dropped 58%. Central Huijin bought 2 million shares in Industrial and Commercial Bank of China, China Construction Bank, and Bank of China. It was a relatively small stake, just less .5% of the bank's total shares.
2009
March 4, 2009: Jesse Wang, Risk officer of the CIC, said the CIC is looking for investments in the resource and commodity sectors. [1]
March 31, 2009: Reports surfaced that the CIC would invest $800 million in the Morgan Stanley Real Estate Fund VII Global. [1]
April, 29, 2009: Hu Bing was appointed private equity head and several departments within the CIC were reorganized. Four new departments were established:Public Market Investment Department, Tactical Investment Department, Private Market Investment Department, and Special Investments Department. The Special Investments department replaced the Fixed Income Investment, Equity Investment and Alternative Investment departments.
June 2, 2009: The CIC's purchased an additional $2.2 billion of shares in Morgan Stanley.
June 15, 2009: The CIC invested A$500m into the Goodman Group, a Australian property company.
August 7, 2009: The CIC released its first annual report covering 2008.
August 26, 2009: Purchased 40% of CITIC Capital for around $250 million.
September 22, 2009: The CIC purchased 15% of the Noble Group for $642 million.
September 23, 2009: CIC loaned $1.9 billion in a Malaysian coal miner PT Bumi Resources Tbk.
September 30, 2009: The CIC invested $949 million in JSC KazMunaiGas Exploration Production.
October 15, 2009: Nobel Oil Group sold a 45% stake in the company to the CIC for $300 million.
October 28, 2009: The CIC invested $500 million in SouthGobi Energy to help develop the Mongolian mine of Ovoot Tolgoi.
October 29, 2009: The CIC chose to invest in another company that has mining assets in Mongolia. The CIC invested up $700 million in Iron Mining International.
November 5, 2009: In two investments, the CIC invested over $2 billion in AES Corporation and its subsidiary, AES Wind Generation
November 11, 2009: It was announced that the Central Huijin investment fund will sell $11.7 billion worth of bonds to recapitalize two banks.
November 12, 2009: It was announced that the CIC had taken an unknown stake in Longfor Properties.
2010
January 2010: SouthGobi Energy, which earlier received a $500 million investment from the CIC, held a IPO which the CIC subscribed for $50 million of shares.
January 12, 2010: Peng Junming, an official at the CIC, said the United States dollar has hit the bottom and would raise against other currencies. He comments were credited in causing a rally on the greenback.
February 2010: In three separate investments, the CIC gave $500 million each to three funds to invest on the secondary market. The firms: Lexington Partners, Pantheon Ventures , and Goldman Sachs
March 5, 2010: Jesse Wang, at the sidelines of Chinese People's Political Consultative Conference, said the CIC does take into account "China factors" while making investments.[1]
March 15, 2010: The CIC's investment in the AES Corporation was completed.
March 2010: The CIC's request for an additional $200 billion was rejected by the state council and the Ministry of Finance. The CIC is expected to request $100 billion.
April 30, 2010: The CIC invested $50 million in L’Occitane's IPO
May 14, 2010: Penn West Energy Trust announced that it had formed a joint venture with the CIC to develop Peace River oil sands project. The company also announced that it had received a direct investment from the CIC.
June 8, 2010: Jesse Wang called 2010 "very challenging" with a 10% mark-to-market loss. [1]
August, 25, 2010: Oriental Patron Financial and the China Investment Corporation signed an agreement to create a joint venture to invest Kazakhstan's agricultural sector.
November 4, 2010: The CIC launched its first office, CIC International, outside of China in Hong Kong.
November 19, 2010: The CIC, in SEC documents, announced the purchased of 28.3% in General Growth Properties and 15.1% in Howard Hughes Corp.[1][2]
