China Investment Corporation has appointed Li Keping, former vice chairman of the National Council for Social Security Fund (NCSSF), as its new chief investment officer.
Gao Xiqing, CIC vice-chairman and president, will no longer serve as CIO, and Zhang Hongli has retired as executive director and vice-president.
Li will head CIC's five departments: asset allocation and strategic research, public market investment, tactical investment, private market investment and special investments.
His replacement at NCSSF hasn’t arrived yet, and the other vice-chairman, Wang Zhongmin, is currently carrying out Li’s former duties. Wang is also in charge of the equity-management department, which oversees investments in domestic private equity, pre-IPO shares and infrastructure projects.
One of the NCSSF’s founders, Li served as director general of the investment-management department from 2001 to 2007. From 2007, as vice-chairman, he oversaw domestic investments in publicly listed securities and global investments and helped chairman Dai Xianglong run the asset-allocation department.
NCSSF has achieved an average annual return of 9.17% over the past 10 years and had AUM of $132 billion by the end of last year. AsianInvestor selected the fund as its institutional investor of the year in May.
Established in 2007, CIC is China’s second largest sovereign wealth fund (after Safe Investment, the investment arm of the State Administration of Foreign Exchange), with $332 billion in assets as of end-2010. Like Safe Investment, CIC was set up to preserve the value of the country's stockpile of foreign reserves, which stood at $3.2 trillion at the end of June.
CIC achieved investment returns of 6.8% and 12.9% in 2008 and 2009 respectively. Its overseas investments lost 2.1% in 2008, but posted a gain of 11.7% in 2009. In an interview in May, chairman Lou Jiwei said CIC has applied for additional funding to increase overseas investments.
According to its 2009 annual report, published in July last year, CIC increased its global investments by $58 billion in the 2009 fiscal year. Among its overseas assets, an average of 36% was invested in equity, 26% in fixed income, 6% in alternative assets and 32% in cash and cash equivalent. In addition, 59% of its global assets were invested through mandates, while CIC managed most fixed-income investments itself.
It was reported earlier this year that CIC is expected to get a new fund injection of up to $200 billion from the government this year.