The China Investment Corp.’s portfolio saw a near-flat return as it lost a little less than 1% of its assets from the previous year, going from $941.4 billion to $940.6 billion, according to its latest annual report.
Peng Chun, the organization’s chairman and CEO, said 2018 was a “rough year for international institutional investors such as CIC” due to the “wild swings of the global capital market and increased volatility of risk assets.” He also said in the report that the fund beat its annual benchmark by 371 basis points. He did not say what that benchmark was.
The plan’s 10-year returns were 6.07%, beating the organization’s benchmark by 45 basis points. CIC is China’s sovereign wealth fund responsible for managing part of the nation’s foreign exchange reserves.
The plan’s allocations were 44.1% alternative investments, 38.3% public equity, 15.2% fixed income, and 2.4% cash and others respectively take up 38.3%, 15.2%, 44.1%, and 2.4%.
“On investment management, we continued to implement refined management of public market investments, adjust and optimize our investment strategy and the makeup of managers, and carry out new strategic investments such as risk factor investing,” Chun said. “Progressively, we increased our investment in alternative assets, consolidated our private equity investments, increased investment in assets with stable returns and stepped up co-investments in various ways.”
Chung summed up the lackluster year and the ones going forward with a quote from a Chinese poem. “Without the continuous bitter cold, there can be no fragrant plum blossom,” he said. “The tougher the road, the sweeter the taste of success—pain precedes gain.”