GIC doubles stake in CICC to be 2nd-biggest investor

Joyce Koh


Government of Singapore Investment Corp. said it more than doubled its stake in China International Capital Corp., making it the second-largest shareholder of the first Sino-foreign investment bank.

GIC, the manager of more than $100 billion of Singapore’s reserves, increased its stake to more than 16.35 percent from 7.35 percent, Jennifer Lewis, spokeswoman of the city’s sovereign wealth fund, said today in response to a query. The stake was bought from Morgan Stanley.

GIC said in its annual report this year that it will boost investments in higher-growth emerging economies, especially in Asia, as expansion in developed nations slows. The fund aims to increase the proportion of investments in public equities and private assets in emerging markets to the “high teens” over time from 12 percent to 13 percent at the end of March.

The sale will end Morgan Stanley’s 15-year involvement in CICC, the top-ranked underwriter of share sales in China. The U.S. firm, which ceded management control of CICC a decade ago, plans to form a partnership with Shenzhen-based China Fortune Securities Co.

Regulatory approvals

Morgan Stanley, the sixth-largest U.S. bank by assets, said it has received all required regulatory approvals for the sale of its 34.3 percent holding in CICC, clearing the way for the sale to four investors. Morgan Stanley was selling the stake to KKR & Co., TPG Capital, Great Eastern Holdings Ltd. and GIC.

Morgan Stanley plans to sell stakes of about 10 percent each to TPG and KKR, and about a 5 percent stake to Singapore’s Great Eastern, the insurer controlled by Oversea-Chinese Banking Corp., four people with direct knowledge of the deal said earlier this month. GIC will buy the remainder, the people said. The 34.3 percent stake is valued at about $1 billion, two of the people said.

Morgan Stanley invested $35 million in CICC when it was established in 1995. It ceded management control in 2000 and CICC is now run by Levin Zhu, the son of former Chinese Premier Zhu Rongji. Singapore’s GIC also bought CICC shares in 1995 and has been one of the founding shareholders, according to CICC’s website.

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