China Investment Corp (CIC), the country’s $1.3tn sovereign wealth fund, has abruptly pulled the plug on a planned $1bn sale of US private equity fund stakes, marking a rare reversal deep into the secondary sale process, according to a report by Bloomberg.
The report cites unnamed sources as familiar with the matter as confirm ing that the proposed sale, run by Evercore, included LP interests in funds managed by Carlyle, KKR, and TPG, was originally aimed at reducing CIC’s exposure to illiquid US assets amid prolonged trade tensions and potential capital restrictions under a second Trump administration.
CIC’s sudden change of course follows recent signs of thawing US-China relations, with officials working toward de-escalation, lessening the urgency for a politically motivated exit. The move also reflects CIC’s sensitivity to perceptions that it is retreating from the U.S. private capital markets.
For private equity secondaries investors, the withdrawal removes a potentially high-profile portfolio from a red-hot market. Secondary deal volume hit a record $160bn in 2023, fuelled by strong demand for LP interests in blue-chip funds at narrowing discounts.
While CIC continues to explore divestments across other US private assets – including real estate and infrastructure – it has also been actively reassuring managers that it remains a long-term strategic partner, despite falling short of its 50% alternatives allocation target.
