China to invest big in British firm

February 4, 2010

, BEIJING, Feb 4 – China\’s sovereign wealth fund plans to invest almost a billion dollars in a British private equity firm, state press reported Thursday, as it steps up its foray into foreign markets.

China Investment Corp (CIC) has finalised the 956-million-dollar deal that could also see it take a 2.3 percent stake in Apax Partners, the China Daily said, citing an unnamed source close to the matter.

The private equity fund group has secured approval from the British Financial Services Authority for the deal, the paper said.

AFP was not immediately able to reach CIC officials in Beijing for comment.

Apax Partners\’ website said it had raised a total of 36.9 billion dollars in funds as of the end of 2008, and invests in the telecommunications, retail, media, healthcare and financial services sectors.

The China Daily report said the move indicated Beijing remained interested in overseas investments for its forex reserves — the world\’s largest at 2.4 trillion dollars at the end of 2009 — despite past losses.

Investments in Western financial institutions such as US-based private equity group Blackstone took a hit in the wake of the world financial crisis.

CIC was set up with a 200 billion-dollar kitty to help China find more lucrative alternatives to its traditional investment choices — safe but low-yielding instruments such as US Treasury bonds.

The company has recently indicated a shift in focus toward more investments related to raw materials such as mineral resources and renewable energy, which are considered increasingly vital to fuelling China\’s fast-expanding economy.

It announced in November a deal to invest 2.15 billion dollars in US power company AES Corp, after earlier agreeing to acquire a 45 percent stake and some other assets of Russia\’s Nobel Oil Group for 300 million dollars.

The company\’s total assets stood at 297.5 billion dollars at the end of 2008, according to corporate data.

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