China’s $814 billion sovereign wealth fund has reportedly named Liu Jun as executive vice president as it moves to replenish its senior executive team after several senior departures since early 2015.
This suggests CIC’s senior management is returning to full strength after five EVPs exited in the past 20 months. However, a question mark remains over who will take over as chief investment officer.
Liu’s appointment comes after the state fund named Bai Tao as executive vice president and the president of Central Huijin Investment, a subsidiary of CIC, in August. He had previously been a vice president at China Life Insurance.
Since Xie Ping stepped down as Huijin president in September last year, former CIC president Li Keping had served as acting head, but he retired in June.
CIC also appointed Qi Bin as an EVP in August. He was previously head of international affairs at the China Securities Regulatory Commission, where he worked for 16 years.
Asked about Liu’s appointment and the responsibilities of Bai and Qi, CIC declined to comment.
Five EVPs have left the fund in the past year-and-a-half. They are Xie and Liang Xiang, who both retired; Fan Yifei who joined the People’s Bank of China in February last year; Jie Zhichun, who left to teach at Shenzhen University in May last year; and Liu Guiping, who became mayor of Chongqing in July.
In late June, CIC appointed Tu Guangshao, previously Shanghai’s executive vice mayor, to replace Li Keping as president and vice chairman. Li retired from the state fund after taking up the CIO role in 2011.
The ongoing changes have been a concern for CIC, noted industry observers, who pointed out that Jie and Liu only served at the fund for one and two years, respectively.
Despite the high turnover among its senior executives, CIC’s investment team is getting more westernised and closer to the standard of a mature sovereign wealth fund, said a Hong Kong-based institutional sales executive at a UK fund house. Yet it will inevitably remain somewhat bureaucratic given its background as a Chinese state institution, he told AsianInvestor earlier this year.
Moreover, industry observers in Hong Kong have raised concerns over the succession plan of CIC’s senior executives, as reported.
The fund posted a negative -2.96% return on its portfolio last year, but its AUM still grew 9% to $814 billion from $747 billion at the end of 2014.
CIC said in its annual report in late July that it was considering adding more private-market assets, including direct investment, physical assets such as real estate projects, and private equity funds, as reported.
Indeed, last week CIC was part of a consortium that acquired German property group BGP for €1.1 billion ($1.2 billion), according to Chinese state publication China Daily. The bulk of the investment reportedly came from CIC.