In focus: China’s CIC looks to stem staff exodus

The world's largest sovereign wealth fund, China Investment Corporation (CIC), is making talent retention a priority, according to a memo from its mid-year meeting. Reports suggest the company may be in the midst of a brain drain.

CIC, which manages $1.35 trillion of assets as of the end of 2021, the latest available data, sees strengthening its workforce as key to building robust foundations for long-term growth.

For this year, CIC plans to “comprehensively strengthen the building of talent and internal management to lay a solid foundation for the company’s long-term development”, according to a memo published on its website on August 9.

A summary of its 2023 work conference held in the beginning of the year also listed talent and internal management improvements as one of the priorities.

The Chinese sovereign wealth fund has experienced significant departures of senior investment personnel over the past two years.

Most recently, it hired Jane Zhao as managing director for public equities to oversee the quantitative stock investment team, replacing Zhang Rong, who resigned in late 2021, according to a Bloomberg report.

“The company is committed to providing an empowering employment environment that rewards strong performance and diverse experiences across divisions and posts, including both grassroots and key functions,” CIC said in its 2021 annual report published in November 2022.

In 2021, CIC formalised its recruitment and promotion process for management and professional development paths.

“This reform has resulted in better-anchored employee expectations and an improved selection mechanism for outstanding young talents,” it said.

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According to Bloomberg, CIC saw an exodus of more than 20 senior investment professionals amid competition with private firms. Retention was affected during the pandemic, as dealmaking in the US became difficult.

Meanwhile, the Chinese sovereign wealth fund has been restructuring itself in order to boost investment efficiency. It formed two committees to approve overseas public- and private-markets investing to replace separate units at CIC International and CIC Capital, which previously held duplicated responsibilities for such approval process.

In 2022, CIC Capital was merged into the main overseas investment department directly reporting to CIC’s executive committee, according to Bloomberg reports.

CIC didn’t respond to a request for comment.

CIC’s overseas investments, undertaken by subsidiaries CIC International and CIC Capital, include public equities and bonds; hedge fund and multi-asset; industry-wide private equity and private credit; direct investments and fund investments in sectors such as real estate, infrastructure, resources and commodities, and agriculture; and managing bilateral and multilateral funds.

Overseas investments account for about 42% of the total assets under management at CIC. The remaining 58%, or Rmb5.58 trillion yuan ($770.6 billion), is managed by subsidiary Central Huijin Investment and is comprised by shares of 17 Chinese financial institutions, including state-owned banks, securities companies, and insurance companies.

Other priorities set for the rest of 2023, according to the memo, included strengthening support for the real economy; optimising its management over directly-control companies; and consolidating risk management and avoiding major risk events.