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CIC, BlackRock China fund could seek $2bn of commitments

17 Aug 2012

Asset management giant BlackRock and CIC, China’s $480bn sovereign wealth fund, are reported to be targeting $2bn for a joint investment fund.

The China Global Opportunities Fund has already received a commitment of up to $500m from CIC, according to a report by Dow Jones.

CGOF is led by Liu Erfei, the former chairman of Bank of America Merrill Lynch’s China operations, who left the US investment bank to head the vehicle.

Although it is not clear where the fund will invest, analysts have noted that Blackrock’s strengths lie in being able to identify takeover targets for Chinese businesses looking to expand abroad.

It is believed the fund could invest in China while also focusing on businesses outside of the country’s borders operating in areas such as technology and natural resources deemed necessary for China’s economic growth.

The vehicle will also give Blackrock a firmer foothold in Asia, where it has a significant presence in Japan but relatively limited exposure elsewhere.

CIC was recently handed a further $50bn by the Chinese government to invest overseas, which follows an additional $30bn handed to the fund at the end of last year that s being used to finance the acquisition of undervalued assets in Europe.

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