China’s sovereign-wealth fund China Investment Corp (CIC) has sold off its stake in US private equity firm Blackstone Group.
CIC held roughly a 4.5% stake at the end of 2017, but Blackstone revealed in a regulatory filing that CIC no longer held any shares in the company as of as February 22. According to international business media, the stake was sold down very gradually. The stake was worth around US$1.9 billion.
CIC was a key investor in Blackstone at the time of its IPO on the New York Stock Exchange in 2007, paying US$3 billion for a 9% stake. The shares initially performed very badly, as the financial crisis hit hard following the collapse of Lehman Brothers in September 2008, and CIC later reduced its holdings.
Nonetheless, CIC continues to be an investor in individual Blackstone funds. According to the most recent filings from Blackstone, its total assets under management figure was US$434 billion as of the end of 2017.
CIC has also been involved in sizeable M&A deals involving assets put up for sale by Blackstone.
In June 2017, Blackstone announced that real estate funds managed by Blackstone had agreed to sell their pan-European logistics company Logicor to affiliates of CIC for 12.25 billion euros (US$13.8 billion).
Logicor owns and operates a portfolio of high-quality logistics assets totaling 147 million square feet in 17 countries with over 70% concentrated in the UK, Germany, France and Southern Europe. Located throughout Europe’s major economies, along primary transport corridors and in close proximity to large population centers, the portfolio is positioned to benefit from the structural shift in demand driven by the rapid growth in e-commerce.
Blackstone chairman Stephen Schwarzman has close ties to China, including via his Schwarzman Scholars programme at Tsinghua University in Beijing.
In addition to the Logicor sale to CIC, Blackstone has done a series of deals with Anbang Insurance, which is now being run by Chinese regulators after the group chairman Wu Xiaohui was arrested and charged with fraud.
In October 2014 Anbang acquired the Waldorf Astoria Hotel in New York for US$1.95 billion. The seller was Hilton Worldwide, which was owned by Blackstone following a leveraged buyout in 2007. Later, in October 2016, Blackstone sold a 25% stake in Hilton to HNA Group, for US$6.5 billion.
