China Investment Corp (CIC) has hired a new North American head for its New York office, filling a months-long vacancy and showing the sovereign wealth fund wants to maintain the outpost despite flaring U.S.-Sino tensions. The move comes as CIC, which oversees trillions of dollars, continues to look for ways to boost its returns by investing in assets overseas that offer the potential for a higher yield than in the domestic Chinese market.
Bai Jian was hired as director of the New York office and immediately replaced Zhang Hong, who left the position last year and returned to China after six years. Zhang was not available for comment.
Founded in 2007 with a mandate to diversify China’s foreign exchange holdings and maximize returns for its shareholders within acceptable risk tolerance, CIC has three subsidiaries: CIC International Co Ltd, CIC Capital Corporation, and Central Huijin Investment Ltd. CIC International conducts public market equity and bond investments, hedge funds, private equity, and direct investments in long-term assets. CIC Capital makes direct investments, and Central Huijin invests in China’s state-owned financial institutions.
CIC also operates several free-trade zones, or FTZs, around the world. These promise companies that operate there benefits like lower taxes and fewer regulatory barriers to help them compete more effectively with companies in mainland China, where the government restricts foreign investment in many industries.
The New York office is CIC’s only one outside mainland China besides Hong Kong. It was set up in 2015 to help the Beijing-based fund manage its U.S. assets, representing about a quarter of CIC’s total investments. Since then, Washington has cracked down on many Chinese yuan-denominated investments by blocking deals that it says could erode its technological edge or jeopardize data security.
Reuters reported in November that the $1.1 trillion fund had considered relocating the office from New York to Toronto, Canada’s leading financial center, or even closing it altogether as tensions rose between Washington and Beijing. The report said that while the decision to keep the office in New York has been made, CIC still faces challenges.
The New York office is staffed by about 50 employees, including analysts and dealmakers. It is also home to the CIC-Goldman Sachs Industrial Cooperation Fund, which Goldman has marketed as a way for American firms to connect with China. Launched in 2017 and dubbed the China-U.S. Industrial Cooperation Fund has already invested in several companies in the United States and Britain. It has also cultivated ties with BlackRock Inc, the world’s largest asset manager. Last month, CIC Chairman Peng Chun met with BlackRock Chief Executive Larry Fink to discuss “cooperation on multiple fronts,” the company said. Neither Chun nor Fink was available for comment. Bai joined CIC in 2007. Previously, she worked for China’s Ministry of Finance for more than 12 years and served as deputy director, according to the Milken Institute website.
