China sovereign fund exits Blackstone funding after 11 years

HONG KONG (Reuters) – China’s sovereign wealth fund China Funding Corp (CIC) has offered its fairness holding in Blackstone Group LP (BX.N), the U.S. non-public fairness agency mentioned in a submitting, ending an 11-year funding.

FILE PHOTO: The ticker and buying and selling data for Blackstone Group is displayed on the publish the place it’s traded on the ground of the New York Inventory Alternate (NYSE) April four, 2016. REUTERS/Brendan McDermid

The unique settlement with Beijing Great Investments – the authorized entity arrange by CIC to spend money on Blackstone – was struck in Might 2007, simply earlier than the non-public fairness agency’s preliminary public providing a month later.

The pact allowed the sovereign wealth fund to come clean with 9.99 p.c of the non-public fairness agency. In 2008, the wealth fund raised its stake in Blackstone to 12.5 p.c, Reuters reported at the moment.

CIC’s exit from Blackstone comes amid rising commerce tensions between Beijing and Washington since U.S. President Donald Trump took workplace simply over a 12 months in the past.

Trump is looking for to impose tariffs on as much as $60 billion of Chinese language imports and can goal the expertise and telecoms sectors, two individuals who had mentioned the difficulty with the Trump administration mentioned on Tuesday.

“As of February 22, 2018, Beijing Great Investments now not owned any non-voting frequent items,” Blackstone mentioned in its annual report filed with the securities regulator earlier this month. It didn’t give particulars.

Beijing-headquartered CIC instructed Reuters late on Wednesday it “step by step divested” its stake in Blackstone in keeping with “modifications available in the market” and as a part of “a standard adjustment of its portfolio”.

The sovereign fund, whose belongings had surpassed $800 billion by the tip of 2016 thanks primarily to stronger returns from its abroad portfolios, mentioned the agency achieved “constructive returns” from its funding.

CIC and Blackstone proceed to cooperate in actual property and hedge funds, in addition to direct investments, it mentioned.

A Blackstone spokesman mentioned in a separate emailed assertion on Wednesday that the U.S. non-public fairness agency continues “to broaden this vital relationship as one in all CIC’s main asset managers,” regardless of the stake sale.

The monetary particulars of the stake sale weren’t instantly clear, and an individual acquainted with the matter mentioned the sovereign fund had been step by step promoting its shares over the previous couple of years.

CIC, which was based to assist China enhance returns on its overseas change reserves, had a couple of four.5 p.c stake in Blackstone on the finish of final 12 months, mentioned the particular person, who declined to be named as the knowledge is just not public.

Reporting by Sumeet Chatterjee; Extra reporting by Matt Miller; Modifying by Mark Potter

Yasir Ali
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