China Investment Corporation
Size: 1.47 trillion yuan (£100 billion)
Major investments: Blackstone $3 billion
History: One of the youngest of the major sovereign wealth funds. It
was set up in October after the acquisition of an investment arm of the
People's Bank of China, the central bank. CIC is in charge of investing
China's vast foreign exchange reserves and is thought to have about $200
billion at its disposal. Earlier this week it emerged that CIC would inject
$5 billion into Morgan Stanley in return for a 9.9 per cent stake. It will
receive 9 per cent interest instead of a dividend.
Gao Xiqing, head of investment at CIC, who graduated with a law degree from
Duke University in the US, was at the China Securities Regulatory Commission
for years before moving on to China's social security fund and then to be
head of investment at CIC.
Citic
Size: 929.2 billion yuan (£64 billion) at December 2006.
Major investments: Recently bought 6 per cent stake in Bear Stearns for
$1 billion
History: Citic's lifespan coincides with the opening up of China to the
outside world. It was founded in 1979 at the behest of Deng Xiaoping, who
threw open China's borders to foreign trade.
The state-controlled bank floated in April for $5.9 billion and, like its
compatriots, has been branching out into the West. In particular, it pumped
$1billion into Bear Stearns, the struggling Wall Street investment bank,
after the high-profile collapse of two hedge funds.
James Cayne, Bear Stearns's chairman and chief executive, hailed the deal as
“the most exciting development I have seen in years.” However, critics
countered that Citic's investment was little more than a bailout of a
struggling bank.
China Development Bank
Size: 2,314 billion yuan (£150 billion) at December 2006.
Major investments: Bought 3.1 per cent in Barclays for £1.6 billion.
History: The China Development Bank was founded in 1994 under the
strict jurisdiction of the country's Government. Given the bank's strong
state links, it has been instrumental in financing the construction of
China's infrastructure, including the huge Three Gorges Dam project, but has
also cast its net abroad.
This year it was one of a number of investors caught in the long-running
battle between Barclays and Royal Bank of Scotland to win control of ABN
Amro, the Dutch bank. Had Barclays succeeded, it would have added another
£11 billion to its £3billion stake. More recently, it has faced questions
over stake building in Rio Tinto, the target of BHP Billiton, but the bank
is adamant it has no intention of launching a bid for Rio.
Temasek
Size: $108 billion (£54 billion)
Major investments: Barclays £2 billion, Standard Chartered £4.25
billion
History: The state-run Singaporean investment fund is led by Ho Ching,
the wife of Singapore's Prime Minister and, according to Forbes magazine,
the world's third most powerful woman.
Temasek, which means sea town in Malay, was established in the early days of
Singapore's industrialisation in 1974. At the time, the Government had
bought stakes in a number of businesses, which were consolidated by the
Singaporean Finance Ministry into what is now known as Temasek.
Yesterday it emerged that Temasek would inject $5 billion in cash into Merrill
Lynch in exchange for a stake, the size of which is still being negotiated.
The fund already holds major investments in other banking giants and most
recently fought off the attentions of Commercial Bank of China (ICBC), Bank
of China and China Construction Bank to buy its 17 per cent stake in
Standard Chartered. Recently, however, it lost money in Barclays's failure
to win ABN Amro, like the China Development Bank. But Temasek's £150 million
loss was much more painful.
GIC
Size: $100 billion to $330 billion (estimate)
Major investments: £4.8 billion stake in UBS
History: GIC, the Singaporean government investment arm that has come
to UBS's aid, was founded in 1982 to manage the city-state's swelling
foreign reserves. With a reputation for maintaining a low profile, it only
goes as far to say it manages assets of “more than $100 billion” (£50.4
billion).
Analysts say that dramatically undershoots its real value and estimate its
true size as as much as $330 billion. It has delivered an average annual
return of 9.5 per cent in dollar terms over the past quarter of a century.
That would make the group the world's second largest sovereign wealth fund
after the Abu Dhabi Investment Authority. It also means it eclipses the $114
billion managed by Temasek Holdings, the Singapore state investment company.
GIC, which holds a SwFr11 billion (£4.8 billion) stake in UBS, is made up of
three separate companies: The Government of Singapore Investment
Corporation, GIC Real Estate and GIC Special Investments. It is led by Lee
Kuan Yew, the first Prime Minister of Singapore and his son, Lee Hsien
Loong, the current Prime Minister.
Abu Dhabi Investment Authority
Size: $875 billion
Major investment: Citigroup $7.5 billion
History: The Abu Dhabi Investment Authority (ADIA) is the investment
arm of Abu Dhabi, the largest oil producer of the seven city-states that
constitute the United Arab Emirates.
It was established in 1976, employs about 1,400 people and has investments in
banking and industrial businesses throughout the Middle East. It was
modelled on Singapore's national investment fund and is the largest
sovereign wealth fund in the world.
In November, the ADIA injected $7.5 billion into Citigroup, in return for a
4.9 per cent stake and a fixed annual payment of 11 per cent of its
investment. The fund will not have any role on the bank's board nor any say
in its governance.
Dubai International Capital
Size: €6 billion (estimate)
Major investments: “Substantial stake” in HSBC.
History: Dubai International Capital, formed in 2004, is owned by
Dubai's ruler, Sheikh Mohammed bin Rashid Al Maktoum. As well as its stake
in HSBC, the fund has several significant holdings in household names such
as Travelodge, Sony and DaimierChrysler. In 2005 it bought Tussauds Group
for £800 million but later sold 80 per cent of the group. It is also famous
for its failed bid for Liverpool Football Club in 2006. The club opted for
American investors.
DIC's Global Strategic Equities Fund took a stake in HSBC in May, but the size
of the purchase was not disclosed, because it did not exceed 3 per cent.
Istithmar
Size: $8 billion (estimate)
Major investments: Standard Chartered, $1 billion
History: Istithmar was established in the UAE in 2003 and has only 35
staff. The private equity group, which is wholly owned by the Gulf State's
oil-rich rulers, operates in a range of sectors including financial
services, real estate and retail. So far it has created joint venture
partnerships with four international equity players from Germany, the UK,
the US and Singapore.
Istithmar is not alone in holding a stake in Standard Chartered; Temasek is
also a substantial investor. In October, Istithmar rolled out the first
branch of the UK-based Joe Bloggs streetwear retail chain in Dubai and has
plans to launch a total of 50 stores across the region.
In April last year it launched Istithmar Hotels and brought the easyHotels
three-star budget hotel chain to the region. In June last year it acquired
the Knickerbocker Hotel in New York's Times Square for £300 million.
