The Biggest SWF in the World

Ashby Monk

Over a lunch meeting in Boston about a month ago, Rachel Ziemba and I discussed the implications of a resurgent China Investment Corporation.  At the time, there were reports (the first of which was here), that the government was ready to reward the fund with a capital injection of up to $200 billion.

Rachel and I did some back of the envelope calculations and came to the conclusion that, with a $200 billion increase in assets, the CIC would be close to topping both Norway’s GPF-G and Abu Dhabi’s ADIA in terms of total assets under management. Indeed, the latter SWFs were, after the financial crisis, sitting in the $400 to $500 billion range, according to Ziemba (and she would know).

Remarkably, a report out today (…er, a rumour out today…) suggests that the CIC is now going to receive a capital reload of $250 billion. If true, the CIC will have $550 billion under management after only three years. This is huge!

Now, as Rachel pointed out to me, we do need a small caveat here; the above figure includes the CIC’s domestic assets, which are tied up in Chinese banks. She’d prefer to focus on the fund’s international assets only, which are around $100 billion right now. However, since lots of other people count the domestic assets and the CIC itself counts its domestic assets in its annual report, let’s also count those assets (just to keep things interesting).

So, in sum, if this capital injection happens, the CIC will be the biggest SWF in the world.

How did this happen? Read all about it here.

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This website is a project of Professor Gordon L. Clark and Dr. Ashby Monk of the School of Geography and the Environment at the University of Oxford. Their research on sovereign wealth funds is funded by the Leverhulme Trust and The Rotman International Centre for Pension Management.

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