China Investment Corp (CIC) is exploring fresh allocations to US-based private equity managers, signalling a potential shift in capital flows after a recent pullback from the market, according to a report by Bloomberg.
The $1.6tn sovereign wealth fund has held discussions in recent weeks with firms including Blackstone and TPG, according to people familiar with the matter. While talks remain ongoing, there is no certainty that commitments will be made or that any capital would be deployed directly into US investments.
The renewed engagement follows a period of retrenchment, during which CIC reduced its exposure to US private markets, including the sale of around $1bn in fund stakes managed by groups such as Carlyle. The fund also stepped back from new commitments to several US managers amid heightened geopolitical tensions between Washington and Beijing.
CIC was previously a significant backer of global private equity, holding stakes in firms including Blackstone and Morgan Stanley. A return of capital from the fund would come as US managers are facing a more challenging fundraising environment, as higher interest rates and subdued exit activity have weighed on distributions.
International sovereign investors, alongside Middle Eastern funds and Singapore’s GIC, have become an increasingly important source of capital as US public pension allocations have slowed.
However, geopolitical uncertainty continues to cloud the outlook. Recent tensions, including conflict in the Middle East and ongoing trade frictions, have disrupted discussions and could reportedly delay or limit any renewed capital flows.
