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Saturday, Feb 27, 2021

Senior Executives Quit China Wealth Fund Over Pay, Opportunities

Senior Executives Quit China Wealth Fund Over Pay, Opportunities

China’s sovereign wealth fund is losing senior-level talent at one of the worst possible times.
Three of China Investment Corp.’s top executives have resigned since April, leaving the $941 billion fund without some of its most experienced managers during a period of historic volatility in global markets. The departures add to a steady exodus in recent years that has included at least 17 team heads and managing directors.

Conversations with former and current managers point to shrinking opportunities, sliding compensation competitiveness and rising restrictions, all of which erode CIC’s attractiveness as a government-owned institution trying to operate as a market-based investor. The departures have now become significant enough that they threaten to hurt the fund’s returns, according to Li Jie, head of the foreign reserves research center at Beijing’s Central University of Finance and Economics.

“There’s no doubt that CIC’s appeal to talent in the market has been declining,” Li said.

Work experience at the fund has brightened executives’ resumes as they seek new opportunities and challenges elsewhere, several people familiar with the matter said. All declined to be identified, citing a reluctance to be seen discussing sensitive information in public.

Representatives from CIC didn’t respond to requests for comment.

CIC, the world’s second-biggest sovereign wealth fund after Norway’s, embarked on a global hiring spree of investment professionals from Wall Street and elsewhere after an initial $200 billion of capital upon inception in 2007. The timing was good; after the credit crisis, many Chinese-born out-of-work executives in the U.S. were looking for a job.

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The firm had 205 investment professionals managing its overseas portfolio as of June 30, 2019 (the latest figures available). Its most notable investments have included a large stake in Blackstone Group Inc., mining company Teck Resources Ltd. and a $13.8 billion purchase of Europe’s Logicor.

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