What’s new: China Investment Corp. (CIC) has dethroned Norway’s government pension fund to become the world’s largest sovereign wealth fund by assets, according to a new report.
CIC had $1.35 trillion in assets under management (AUM) by the end of 2022, according to a Jan. 1 report published by Global SWF, a platform that tracks sovereign investors. The fund ballooned by $129 billion in the past year.
By comparison, Norway’s Government Pension Fund Global shrank from $1.33 trillion to $1.15 trillion in AUM during the same period, Global SWF data show. The fund booked a $164 billion loss in the first half of 2022, according to Norges Bank Investment Management, which manages the fund.
The background: CIC’s performance bucked the trend among its peers, with Global SWF estimating that total AUM at sovereign wealth funds dropped $1 trillion last year, mainly due to “the simultaneous and significant (>10%) correction of bonds and stocks, which had not happened in 50 years.”
“2022 was the first year ever that sovereign wealth funds shrank in value,” Global SWF said. “These are paper losses and some of the funds will not see them realized in their role as long-term investors, but it is quite telling of the moment we are living.”
CIC was founded by the Ministry of Finance in 2007 to diversify the investment of China’s huge foreign exchange holdings, which have topped $3 trillion in recent years.
The fund has in recent years beefed up its investments in alternative assets. As of the end of 2021, about 47% of its overseas portfolio comprised such assets, including property, hedge funds, as well as private equity and credit. Stock holdings in publicly traded companies accounted for 35.4% and fixed-income assets 15.4%, according to its 2021 earnings report.
Contact reporter Kelsey Cheng (kelseycheng@caixin.com) and editor Jonathan Breen (jonathanbreen@caixin.com)
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