(January 14, 2013) — Changes in investment tactics due to market volatility helped push China Investment Corporation’s (CIC) returns to over 10% last year, the fund’s chairman and CEO has revealed.
Lou Jiwei, the head of the world’s fifth largest sovereign wealth fund (SWF), told CNBC 2012 had been a better year for the investor than 2011, and changes to its tactical strategy improved returns.
“2012 was a far easier year than 2011, and the returns are much better, but the final number has not come out,” Lou told CNBC. “The report for the long-term assets will come out a quarter later, but we are confident that our returns are over 10%.”
In 2011, the $482 billion fund was hit by its first ever drop in net profits, which was compounded by a loss on its overseas investments of almost 5%.
Lou said the fund had not changed its overall approach towards investment last year, but under the “current circumstances” it had changed some of the tactics for investment. “We had to change our tactics because we observed some volatility in the market, especially volatility that was created by policies and this really hampered return prospects,” Lou said.
He did not expand on what these changes were, but outlined where the fund was looking for opportunities in the near future.
China would continue to drive the global economy, the CIC chief said, meaning its home nation and neighbouring Asian states would provide investment prospects.
Further afield, Lou said Canada and the United Kingdom had become the most welcoming for foreign capital. He said the United States had once been open to international investors, but had become less inclined to take external money.
For the full interview, click here.
For a profile of the CIC chairman and CEO who featured at number 12 of aiCIO’s Power 100 last year, click here.