15.30% CIC first disclosed the cumulative annualized state-owned capital appreciation rate

On July 22, the National Sovereign Wealth Fund China Investment Co., Ltd. (hereinafter referred to as: China Investment Corporation) released its 2015 annual report. As of the end of 2015, CIC’s overseas investment return rate in 2015 was -2.96% in US dollars. Since its establishment, the cumulative annualized rate of return has been 4.58%, and its total assets have exceeded US$810 billion. This year's annual report disclosed for the first time that the company's cumulative annualized state-owned capital appreciation rate was 15.30%.

Three major factors affect investment income, which is affected by the appreciation of the US dollar.

According to the annual report, in 2015, CIC's total assets were 813.762 billion US dollars, total liabilities were 890.2 billion US dollars, and net profit was 79.344 billion US dollars, down by 9.753 billion US dollars from 890.97 in 2014.

Affected by factors such as fluctuations in international financial markets and exchange rate losses caused by the appreciation of the US dollar, the net rate of return on investment by CIC in 2015 was -2.96% in US dollars. Since its establishment, the cumulative annualized net rate of return has been 4.58%.

As a national sovereign wealth fund, CIC’s every move has received much attention from the market. This is the eighth “transcript” that CIC has shown since its establishment. From 2008 to 2014, CIC's investment yields were -2.1%, 11.7%, 11.7%, -4.3%, 10.6%, 9.33%, and 5.47%, respectively. From this point of view, the negative performance of investment returns in 2015 is also the third time in the CIC annual report.

Compared with the investment return rate of 9.33% in 2013 and 5.47% in 2014, the negative performance of CIC's investment income in 2015 is not satisfactory. In this regard, CIC Foreign Affairs Director and spokesperson Liu Fangyu analyzed at the media communication meeting, three factors dragged down the performance of CIC in the past year.

Specifically, the first is the deep decline in commodity prices, which has a greater impact on the valuation of some of the company's direct investment projects. In 2015, the Goldman Sachs Commodity Index fell 32.86%, crude oil and iron ore prices fell by 36.28% and 37.37% respectively. Second, the negative interest rate policy caused bond and equity investment income to be lower than expected. Last year, MSCI (Morgan Stanley Global Stock Index) fell by 2.36%, emerging market stocks fell by 14.86%, bonds fell by 11.15%, and that the company's performance was measured in US dollars. Last year, the US dollar appreciated by 9.26%, resulting in a large exchange rate in the total portfolio. loss. Although the company has been making corresponding adjustments, in the short term, these external drag factors are still difficult to completely subside.

In the distribution of overseas investment portfolios, CIC's 2015 open market stocks, fixed income, absolute income, long-term assets and cash products accounted for 47.47%, 14.44%, 12.67%, 22.16% and 3.26%, respectively.

In terms of investment management, Liu Fangyu said that in 2015, CIC focused on building a simple, transparent and resilient asset allocation portfolio and introduced a reference portfolio configuration model. In terms of open market investment, CIC continued to improve its self-operated investment platform and capacity building, and built a quantitative self-investment investment platform. The revenues of many self-operated portfolios have significantly exceeded the benchmark. The portfolio value of the self-operated portfolio has exceeded the global positive strategic target excess return and target information ratio since the opening of the position in 2013. Compared with the global peers, the combined performance of the three-year performance is ranked in the top 10%, and the information is ranked in the top 5%. . In terms of long-term asset investment, it has increased investment in stable income assets such as real estate and infrastructure.

In the overseas stock portfolio, in 2015, CIC's US stocks accounted for the highest proportion, accounting for 46.32%, followed by non-US developed stocks, accounting for 42%, and emerging stocks accounting for 11.68%. In terms of investment, finance, information technology, consumer goods, and medical and health care are four important sectors, accounting for more than 10%, 21.54%, 14.66%, 12.62%, and 11.61%, respectively.

Regarding the future investment strategy of CIC, Liu Fangyu said that the adjustment of investment strategy is mainly to adjust the asset allocation strategy, increase the investment reference portfolio, optimize portfolio management, strengthen refined management in the open market, and make a strategy in stock bond allocation. Optimize management, evaluate external fund managers, select and adjust according to expectations, promote private equity investment, increase long-term assets such as real estate, increase investment scale of long-term assets, strengthen cooperation opportunities for fund managers, and increase investment And the opportunity to vote together.

Improve organizational structure for the first time to disclose annualized state-owned capital appreciation rate

CIC was established in September 2007 with the aim of realizing diversified investment in national foreign exchange funds and maximizing equity interests within acceptable risk.

In 2015, the company completed the construction of a professional direct investment platform by reshaping the internal management structure – CIC Overseas, and established a management model of “China Investment Corporation: CIC International + CIC Overseas + Central Huijin”. Among them, the two major sectors of overseas investment business: CIC International is mainly responsible for open market, real estate and pan-industry private equity investment; CIC overseas mainly conducts direct investment in centralized holdings, achieving a clearer, professional and targeted business division of labor. .

In this regard, Liu Fangyu further introduced that according to the adjusted corporate governance structure, CIC's overseas investment business is divided into two: CIC International is mainly responsible for open market stocks and bond investments, hedge funds and real estate investment, and pan-industry private equity funds commissioned investment. , investment and minority equity financial investment; CIC overseas mainly engaged in overseas direct investment and multi-bilateral and platform fund management.

According to the above-mentioned organizational structure, CIC has formed overseas investment business by CIC International and CIC Overseas, and another subsidiary, Central Huijin Investment Co., Ltd. (hereinafter referred to as “Central Huijin”), according to the authorization State-owned key financial enterprises carry out equity investment and realize the preservation and appreciation of state-owned financial assets.

It is known that since its inception, the CIC report disclosed for the first time that the cumulative annualized state-owned capital appreciation rate is 15.30%. In response, Li Wenping said in response to a question from the reporter of China Business News, this is the first time that CIC has issued a state-owned asset appreciation rate. The registered capital of CIC is 200 billion U.S. dollars, and the SAFE has injected another 4.9 billion U.S. dollars. The company's capital has accumulated to 249 billion US dollars. CIC's income source is the equity income of domestic assets and overseas investment income.

During the stock market crash last year, the Central Huijin was an important member of the “national team” and repeatedly operated in the secondary market. Li Wenping said that the stock market disaster had little impact on state-owned assets.

Focus on long-term asset investment to increase infrastructure and real estate investment

In terms of long-term assets, Liu Fangyu said that the company has increased its investment in stable income assets such as infrastructure and real estate.

In terms of infrastructure, in 2015, CIC, together with institutional investors and industry investors, launched a number of infrastructure investment projects, including Tank & Rast, the largest highway service franchise in Germany, and Kumport, Turkey's third largest container terminal.

In terms of real estate, in 2015, CIC focused on large-scale direct investment projects in developed markets, and completed nine investments throughout the year, all of which were major real estate transactions in the region, including the Celsius portfolio of retail assets in France and Belgium, and Australia. The Investa project, an office property portfolio in Sydney, Melbourne and Brisbane, has some influential and iconic projects in the global industry.

Liu Fangyu introduced that last year, the company seized market opportunities, steadily carried out project reduction and exit work, and obtained good investment income, with a recovery of about 10.6 billion US dollars. In addition, CIC is also deepening its investment projects with Chinese elements, trying to enter emerging industries with good growth prospects and making full use of private equity network to carry out relevant investments.

In terms of direct investment, Liu Fangyu said that in the original CIC overseas strategic layout, optimize investment layout, promote key investment areas, from the traditional fields of infrastructure, agriculture, minerals, energy and other industries, gradually develop to high-tech, manufacturing Industry, expand investment channels and networks as soon as possible. Under the investment environment with lower global asset yields, CIC will focus on capacity cooperation with China's economic development and investment opportunities for high-tech upgrading. For global peers in infrastructure, health care, and innovative pensions, Investment companies also closely track the areas of concern to the global industry. At the same time, CIC overseas pays attention to post-investment management and exit work. In financial investors, it is often easy to neglect post-investment management and exit. CIC has established a long-term auditing and accountability system for the project.

In terms of investment cooperation, CIC actively leverages the global network resources and professional platform advantages of sovereign wealth funds, and connects hundreds of domestic and foreign companies with cross-border investment needs through industry combing, corporate visits, and field research. It has carried out more than 10 investment cooperation with leading enterprises in key industries, and actively explored the mode of production and integration. While realizing its good investment income, it has strongly supported the international development of domestic and foreign enterprises.

As for the impact of the Brexit incident on the overseas investment layout, Liu Fangyu said that the research team of CIC has been closely tracking the progress of the UK referendum. The impact of the referendum results in the international market continues to ferment. CIC pays close attention to macro information. And Europe is a major investment destination for CIC, requiring UK investors to provide relevant information and pay close attention to market and investor information.