The initial manifestation of CIC's investment strategy and entrusted parallel management

A positive and robust diversification investment strategy in the embryonic beginning of the initial display of 200 billion U.S. dollars capital urgently to find the operation of export pressure, and did not change the firm cautious investment of Chinese investment companies, its positive, robust, diversified investment strategy embryonic first. In 2008, CIC will increase investment in offshore financial product portfolios as foreign investment managers bid for the end of their bids. In addition, the investment in Agricultural Bank and other financial institutions such as the bank will become the focus of CIC's domestic capital operation. Active financial investors in May 2007, CIC spent 3 billion dollars as a shareholder of Blackstone Group, a well-known US private equity firm. However, the first trading was a bad one, and Blackstone's share price fell sharply, dragged down by the US subprime mortgage crisis and recent international turmoil. December 31, 2007, the Blackstone closing price of 22.13 U.S. dollars/shares, CIC the investment of the book floating deficit of 750 million U.S. dollars. Despite the challenges, CIC has not stopped investing overseas and is still targeting investment banks for equity investments. "We are faced with a strong pressure to invest abroad." Said Lou Jiwei, CIC's chairman. According to his initial accounting costs, CIC needs to pay 5% per cent of the interest for 200 billion dollars a year. "It means I have to earn 300 million every day when I open my eyes." "The huge cost comes not only from interest payments, but also from exchange losses that accompany the renminbi's appreciation." Under heavy pressure must move forward. In December 2007, CIC invested 5 billion dollars as Morgan Stanley's second-largest shareholder. According to the agreement, CIC's investment in Morgan Stanley will be converted into a stake of not more than 9.9% in August 2010. Before that, Morgan Stanley would pay 9% per cent of the annual dividend (three times times higher than the average), giving CIC a steady profit of $450 million a year. It is noteworthy that CIC's investment in Blackstone and Morgan Stanley emphasizes its own financial investment and that, because of its lack of voting rights, CIC will be compensated for the order in which the proceeds and the liquidation of the property are distributed. By highlighting the role of financial investors, CIC has downplayed the color of strategic investment and will increase the depth and breadth of its participation in international markets, according to people. Another notable gain from CIC is the investment in the 0390,hk H shares. In November 2007, CIC subscribed to the China Iron H shares for 100 million dollars. December 31, the Hong Kong shares of China Railway reported an increase of HK $10.74, up 85.8% from its IPO price. In addition, CIC spent One-third of its capital buying Huijin. Due to the good operating efficiency of Huijin holdings, such as banks and securities companies, in 2007, the dividends of several listed banks were sufficient to share more than half of the interest pressure. In 2007, Huijin bought 20 billion yuan of Everbright Bank at a price of $1 per share, and the premium for the sale could be more than 10 times times if Everbright Bank was listed in 2008. The aggressive investment style of CIC is also reflected in the investment of indexed products. In 2007, CIC launched a bid for the selection of overseas investment managers, and the investment products were positive stocks. Gradual diversificationOf the Investment portfolio Lou Jiwei "warfare" as a metaphor for CIC's capital operation in the international market, while the investment platform is placed on the first item of the agenda, the project is expected to be "completed" in the first half of 2008, and the future CIC strategic allocation will gradually diversify from a single equity investment in 2007. Mr Lou said he would invest 70 billion of billions of dollars in a phased and fragmented portfolio of assets in the future. With foreign investment managers in place and global trader to the post, CIC in 2008 will increase the index products, bond market investment, investment area will also expand. Real estate and infrastructure construction will also enter the scope of CIC's asset allocation.　　CIC will not be involved in this area for a short period of time in order to keep assets flowing to pay interest on capital, but Mr Lou says it will seize direct investment opportunities at the right time. In addition, in the industry distribution, CIC's investment also presents the diversification situation, the consumption, the industry may include in its investment vision. Gao, general manager of CIC, also said he would remain concerned about clean energy, environmental protection and other areas. Self-commissioned and entrusted parallel Investment Management It is common practice to entrust external investors with the management and operation of funds from the experience of other sovereign funds operating in other countries. CIC will start preliminary work for overseas investment managers in January 2008, and a significant portion of the future of indexed investment products will be entrusted to the operations of internationally renowned asset management companies. According to Mr Lou's timetable, CIC began primarily to entrust external fund managers with a gradual increase in self-employment, and plans to set up branches in major international financial centres at a time of greater self-employment. At present, the talent and risk mechanism is the main challenge for CIC, the company needs more management personnel and front-line operators to join, need a set of strict risk control mechanism to avoid the accumulation of systemic risk caused the company to fail. Currently, CIC is establishing an internal control system for investment decision-makers and risk managers to build good corporate governance structures.