China's wealth fund pulls plug on US$1 billion private equity sale
Earlier this year, China Investment Corporation (CIC) looked to offload fund positions with firms including Carlyle Group, KKR, and TPG to reduce its US exposure. Months later, it has signalled to would-be buyers and managers that it's no longer selling the stakes, according to sources familiar with the deal who asked not to be identified discussing private matters.
A representative for CIC did not respond to a request for comment. Evercore, the investment bank tapped for the sale, also did not respond.
It's rare for institutions to pivot after advancing this far in a sale process. The proposed deal had highlighted the US$1.3 trillion state fund's reduced appetite for risk-taking, and its concerns about having so much money tied up in less liquid US assets amid the US-China trade impasse.
At the same time, CIC was sensitive to being perceived as being in retreat, according to sources familiar with the matter.
In recent weeks, US and Chinese officials have hammered out a framework to de-escalate tensions, reducing pressure on CIC to divest. The US has signalled it's willing to remove restrictions on some tech exports in exchange for assurances China is easing limits on rare earth shipments.
BT in your inbox
Start and end each day with the latest news stories and analyses delivered straight to your inbox.
Sign Up
Sign Up
A trade war with the US – and the threat that President Donald Trump's administration could levy capital restrictions on adversary nations – creates new risks for funds such as CIC, which manages a chunk of China's foreign reserves. The Chinese money manager is selling other US private assets, which may include real estate and infrastructure holdings, Bloomberg News reported earlier.
In the face of tighter scrutiny from Washington, the state investor has become a quieter presence on dealmaking circuits compared with its heyday. In the 2000s, CIC made big bets on Blackstone and Morgan Stanley, and was a symbol of China's ambitions to parlay its vast foreign reserves into power and clout.
Its allocation to alternative assets has slipped below its 50 per cent target, according to its latest annual report for 2023. In recent weeks, it's tried to persuade outside firms that it remains a committed partner, another source familiar said.
CIC would have sold into a market eager to absorb private equity fund stakes with marquee managers. Intense competition among secondary buyers has led to lower discounts for institutions looking to offload positions. The value of secondary deals surged to a record US$160 billion last year, according to Evercore, as more investors seek to cash out investments early and buyers are attracted by discounts. BLOOMBERG
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Business Times
15 minutes ago
- Business Times
Oil settles down; build in US fuel inventories offsets signs demand growing
[HOUSTON] Oil prices settled marginally lower on Wednesday as US fuel inventory builds and concerns about wider economic impact from US tariffs outweighed some signs of increasing demand. Brent crude futures settled 19 cents, or 0.3 per cent lower, at US$68.52 a barrel. US West Texas Intermediate crude futures were down 14 cents, or 0.2 per cent, at US$66.38. US petrol stocks rose by 3.4 million barrels last week, the Energy Information Administration said. Analysts had expected a draw of 1 million barrels. Distillate stockpiles, which include diesel and heating oil, rose by 4.2 million barrels, EIA data showed, far surpassing expectations for a 200,000-barrel rise. Crude inventories fell by 3.9 million barrels to 422.2 million barrels last week, the EIA said, exceeding forecasts for a 552,000-barrel draw. 'I think the market is disappointed to see large builds in petrol and distillate inventories as refiners are operating at near their highest levels of the year turning oil into refined products,' said Andrew Lipow, president of Lipow Oil Associates, referring to refinery rates of nearly 94 per cent of total capacity. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up 'I think investors are also disappointed to see petrol demand fall just after July 4 as we are now in the peak summer driving season,' he added. The amount of products supplied for gasoline, a proxy for demand, eased 670,000 barrels per day to 8.5 million bpd. US President Donald Trump's tariff war continued, with the European Commission preparing possible retaliation if talks with Washington fail to secure a trade agreement for the European Union. On Monday, Trump said the US will impose 'very severe tariffs' on Russia in 50 days if there is no deal to stop the war in Ukraine. Short-term US interest-rate futures rose after a report that Trump was likely to fire Federal Reserve Jerome Powell soon, with traders now betting on rate cuts starting in September and at least one more by December. Trump said he was not planning to fire Powell, but declined to rule out anything. Interest rate cuts typically boost economic activity and energy demand. Helping keep a floor under prices, US economic activity increased slightly in recent weeks, but the outlook was neutral to slightly pessimistic, the Federal Reserve said on Wednesday, as businesses reported the Trump administration's higher tariffs were putting upward pressure on prices. Opec's monthly report on Tuesday forecast that the global economy would do better in the second half of the year. Brazil, China and India are exceeding expectations while the United States and EU are recovering from last year, it added. Chinese state-owned refiners are ramping up output after completing maintenance to meet higher third-quarter fuel demand and to rebuild diesel and petrol stocks at multi-year lows, traders and analysts said. Barclays estimated that Chinese oil demand in the first half of the year grew by 400,000 bpd year-on-year to 17.2 million bpd. On the supply side, drone attacks for a third day on oilfields in Iraq's semi-autonomous Kurdistan region have slashed crude output by 140,000 to 150,000 barrels per day, two energy officials said on Wednesday, as infrastructure damage forced multiple shutdowns. REUTERS
Business Times
15 minutes ago
- Business Times
Starwood strikes US$2.2 billion real estate deal with Brookfield
[NEW YORK] Starwood Property Trust agreed to acquire Fundamental Income Properties for US$2.2 billion as chief executive officer Barry Sternlicht aims to further diversify the company's revenue. It's acquiring Fundamental's operating platform and real estate portfolio from Brookfield Asset Management, according to a statement on Wednesday (Jul 16). The deal includes 12 million square feet (1.11 million square metres) of space across 467 properties, with tenants spanning food production, auto services and retail industries. Fundamental specialises in net lease real estate investments, in which tenants pay property expenses such as taxes, insurance and maintenance in addition to rent. The model can generate steady income while limiting management duties. 'The acquisition of Fundamental marks the next evolution, but not the last, of our platform,' Sternlicht said in the statement. 'While we have strong experience in the net lease sector, the scale and infrastructure of Fundamental provide us with the opportunity to significantly grow in this attractive asset class using our combined expertise.' Starwood will assume Fundmental's existing financing facilities of US$1.3 billion when the transaction is completed, according to the statement. That's expected to happen later this month. Shares of Starwood slid 3.3 per cent to US$20.16 in extended trading at 4.38 pm in New York. The stock had gained 10 per cent this year through the close of regular trading. BLOOMBERG
Straits Times
an hour ago
- Straits Times
While You Were Sleeping: 5 stories you might have missed, July 17, 2025
Find out what's new on ST website and app. Bahrain's Crown Prince Salman bin Hamad Al Khalifa (left) meeting US President Donald Trump in the Oval Office of the White House on July 16. Bahrain announces $20b in US deals during Trump talks Bahrain's crown prince announced on July 16 plans to invest more than US$17 billion (S$21.8 billion) in the United States at a meeting with President Donald Trump focused on trade, Iran and regional security issues. Under the plan, Bahrain was expected to sign a deal valued at about US$7 billion for its national carrier, Gulf Air, to buy 12 Boeing aircraft with an option for six more and 40 General Electric engines, according to a White House official. 'We're very happy to be announcing US$17 billion worth of deals that are coming to the United States,' said Crown Prince Salman bin Hamad Al Khalifa. 'And this is real. These aren't fake deals.' READ MORE HERE Syria pulling troops from Druze heartland after Israeli strikes Syria announced that its army had begun to withdraw from violence-hit Sweida on July 16, following a wave of Israeli strikes on the capital and a US call for government forces to leave the majority-Druze southern city. The United States, which is close allies with Israel and has been trying to reboot its relationship with Syria, said an agreement had been reached to restore calm in the area, and urged 'all parties to deliver on the commitments they have made'. Top stories Swipe. Select. Stay informed. Singapore Over 600 Telegram groups in Singapore selling, advertising vapes removed by HSA Singapore 2 weeks' jail for man caught smuggling over 1,800 vapes and pods into Singapore Singapore Jail for man who fatally hit his daughter, 2, while driving van without licence Sport 'Like being in a washing machine with 40 deg C water': Open water swimmers brave challenging conditions Singapore Primary 1 registration: 38 primary schools to conduct ballot in Phase 2A Singapore ComfortDelGro to introduce new taxi cancellation, waiting fee policy Business Cathay Cineplexes gets fresh demands to pay up $3.3m debt for Century Square, Causeway Point outlets Singapore Countering misinformation requires both laws and access to trusted news sources: Josephine Teo The Syrian government earlier announced a new ceasefire in Sweida that would bring a halt to military operations there, after clashes that a war monitor said had left more than 300 people dead since July 13. READ MORE HERE Two dead, 27 injured as Russia bombs Ukraine town A strike by Russian forces on July 16 on a shopping centre and market in Dobropillia, a town near the front line of the 40-month-old war, killed two people, injured up to 27 and caused widespread damage, officials said. It followed a warning from US President Donald Trump on July 14 for Moscow to reach a peace deal with Ukraine within 50 days or face severe sanctions. Russia had earlier fired hundreds of drones, artillery and a ballistic missile into Ukraine, injuring dozens of people. READ MORE HERE Air India probe finds no issues with fuel switches: NDTV PHOTO: NYTIMES Air India has completed the inspection of fuel control switches on Boeing 787 planes with no issues being found, Indian broadcaster NDTV said on July 16, citing an official. Reuters could not immediately verify the NDTV report. India on July 14 ordered its airlines to examine fuel switches on several Boeing aircraft models, while South Korea ordered a similar measure on July 15, as scrutiny intensified of fuel switch locks at the centre of an investigation into a deadly Air India crash in June that killed 260 people. READ MORE HERE Celebrity paranormal investigator dies on US tour PHOTOS: NEW ENGLAND SOCIETY OF PSYCHIC RESEARCH/FACEBOOK Celebrity paranormal investigator Dan Rivera died suddenly on July 13 while on tour in the United States with the infamous Annabelle doll – the supposedly demon-possessed toy that inspired the horror flick The Conjuring. Coincidence? The answers are not forthcoming, as the exact cause of his death has yet to be ascertained. Adams County Coroner Francis Dutrow listed it simply as 'pending'. Paramedics were called to Mr Rivera's hotel in Gettysburg, Pennsylvania, on July 13, but efforts to revive him failed.
