China Investment Corporation (CIC), the $1.33tn sovereign wealth fund, is preparing to divest approximately $1bn in US private equity stakes on the secondary market, amid rising geopolitical tensions with Washington.

The stakes span eight major private equity managers, including Blackstone and Carlyle, and originate from positions CIC took between 2016 and 2017. Evercore is advising on the sale, which is expected to conclude by the end of June, subject to pricing and buyer demand.

The planned exit comes as Chinese state-backed capital steps back from US private markets, following regulatory scrutiny and worsening US-China trade relations. CIC has not publicly commented on reports that it, alongside other Chinese institutional investors, is pausing new allocations to US-based funds.

CIC’s exposure to US assets remains substantial. According to its 2023 annual report, 60% of its public equities portfolio is allocated to the US, and 64% of its total assets are externally managed.

Sovereign wealth funds, secondaries specialists, and family offices are reportedly assessing the deal. Singapore’s GIC is among those showing interest. The portfolio could be sold in tranches or as a single package, depending on negotiations.

Source: Reuters