Wednesday, 3 December 2008
China wealth fund lacks stomach for financial buys
China Investment Corp, the sovereign wealth fund that has incurred steep paper losses on its stakes in U.S. financial firms, said on Wednesday that it is “not brave enough” to invest in foreign financial firms and lacks confidence in the shifting U.S. financial regulatory situation.
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China wealth fund lacks stomach for financial buys
HONG KONG, Dec 3 (Reuters) - China Investment Corp, the sovereign wealth fund that has incurred steep paper losses on its stakes in U.S. financial firms, said on Wednesday that it is “not brave enough” to invest in foreign financial firms and lacks confidence in the shifting U.S. financial regulatory situation.
“It’s changing every week. How can I be confident?,” Lou Jiwei, head of CIC, said during the Clinton Global Initiative event in Hong Kong, referring to U.S. government efforts to rescue the devastated financial services sector.
He said the fund has grown shy when it comes to investing in overseas financial companies.
“We don’t have the courage to invest in financial institutions anymore, because we don’t know what problems we will put ourselves into,” Lou said.
CIC has incurred substantial unrealised losses on its stakes in U.S. private equity firm Blackstone Group and Wall Street bank Morgan Stanley.
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