China's sovereign wealth fund China Investment Corp (CIC) posted a 1.88 percent rise in 2016 net profit, boosted by stronger returns from its overseas portfolio.
Profit rose to $75.3 billion from $73.9 billion a year earlier, its annual report showed on Tuesday. Total investment income was $83 billion in 2016, compared with $76.7 billion in 2015. CIC's accumulated annualized investment return rose to 4.76 percent last year.
The increase was bolstered by portfolio adjustment and high returns on stock markets in Europe and the U.S., Li Wenping, managing director of CIC's financial department, told a news conference.
The fund is seeking to increase direct investment in the U.S., including direct investments in infrastructure and property, with its newly established New York office, spokeswoman Liu Fangyu told Reuters. Presently, 42 percent of CIC's total overseas portfolio is in the U.S., but mostly in public markets, she said.
"We established the U.S. office with the mandates to explore the opportunities and …establish close relationships with local partners, local government agencies and local regulatory agencies," she noted.
Beijing-headquartered CIC was founded in 2007 to help China earn a higher return on its foreign exchange reserves. The fund reported a 6.22 percent return on its overseas investments in 2016, compared with -2.96 percent in 2015.
"Eight years following the global financial crisis, major economies' rounds of easing policies and developed countries' sluggish economic recovery led to intensifying competition among global funds, adding pressure on investment returns," CIC Vice Chairman and President Tu Guangshao said in the report.
"Potential risks are the rising uncertainties of global politics and policies," he said, referring to the outlook for 2017.
CIC invests overseas through two subsidiaries: CIC International Co and direct investment vehicle CIC Capital Corp. CIC Capital, launched in 2015, signed 16 deals worth $5 billion last year.
CIC started with initial funding of $200 billion. By the end of 2016, its assets had surpassed $813.5 billion.
