"This is going to be the largest amount of incremental money to come into the industry at any one time in recent memory."
The China Investment Corp., which controls $200 billion in sovereign-wealth funds, issued a notice late Wednesday inviting management bids for an undisclosed portion of the agency's funds that are set aside for overseas investment.
"This is the first concrete step the CIC has taken to award external mandates," wrote Jing Ulrich, managing director of J.P. Morgan's China equities group, in a note early Thursday. "It appears CIC is seeking to build broadly diversified global portfolios covering four asset classes."
Those classes include global stocks with a goal of beating respective MSCI benchmarks by around 3%, with dividends reinvested, in U.S. dollar terms, according to Ulrich.
The Chinese sovereign-wealth fund also is looking for managers to beat benchmarks for developed foreign markets outside the United States by around 2% a year in total returns, net of fees.
Merrill Lynch analysts estimate that between $3.1 trillion and $6 trillion in new investment dollars could be pumped into world stock markets by such funds in the next five years. This year alone, Morgan Stanley researchers say sovereign-wealth funds, mainly in Asia and the Middle East, have poured around $45 billion into a range of companies and assets.
Fonte: Market Watch
