China’s CIC eyes stake in Thailand's $2.8bn Future Fund

Bangkok’s new sovereign vehicle aims to enlist global capital to help boost domestic infrastructure.

The THB100 billion (€2.51 billion; $2.8 billion) Thailand Future Fund (TFF), established last year to support domestic infrastructure projects, is seeking investments from institutional investors. 

China Investment Corporation (CIC), the Chinese sovereign wealth fund responsible for managing part of the country’s foreign exchange reserves, has expressed interest in investing in TFF, according to local reports.

Thailand’s Finance Minister Apisak Tantivorawong led a delegation to Beijing last month to meet a group of Chinese investors, both state enterprises and large private companies.

Tantivorawong said that CIC is interested as TFF has an investment policy that matches its own in terms of seeking investment opportunities in quality, low-risk assets with attractive returns over the long term. 

Among the Chinese investors that attended the meetings with the Thai delegation were the China National Building Material Group, China Minmetals Corporation and Power China Group. 

Press reports said that the Bank of Thailand would create TFF with the initial seed funding in the form of a public-private partnership fund. 

The government has not decided how much of the vehicle would come from within Thailand and foreign investors. 

The fund is expected to be managed by mutual fund houses as the investments would be global. 

The fund will be listed on the Stock Exchange of Thailand, following the model of Vayupak Fund, a state-controlled infrastructure fund set up in 2003.

Last December, the Thai government approved 20 infrastructure projects worth a combined THB1.79 trillion, as part of its effort to kick-start an ambitious development plan from 2016 to 2022. 

Should the project go through, the year 2016 and 2017 would see the highest annual volumes of public infrastructure construction in history, according to the government.