China’s sovereign wealth fund the China Investment Corporation is near an agreement to invest around $4 billion (€2.76 billion) in US buyout firm JC Flowers’ latest fund, according to media sources.
The commitment would be one of the largest ever made. UK alternative assets manager SVG made a €2.8 billion ($4.06 billion) commitment to UK buyout firm Permira’s fourth fund in 2006 which is thought to be the biggest.
JC Flowers closed its last fund on $7 billion in 2006. The firm’s profile has never been higher, in spite of its founder Christopher Flower’s aversion to publicity, thanks to an aborted bid for troubled UK bank Northern Rock and its reneging on an agreed $30 billion bid for US loan provider Sallie Mae.
The turmoil in the world’s financial sector has already led to several large scale investments by Asian and Middle Eastern sovereign wealth funds in the world’s biggest banks, including the Abu Dhabi Investment Authority’s $7.5 billion acquisition of a stake in Citi and Singaporean sovereign wealth fund GIC’s planned Sfr13 billion ($11.8 billion; €8.2 billion) investment in UBS alongside an unnamed Saudi Arabian investor.
China Investment Corporation invested $3 billion in Blackstone’s management company at $31 per share in advance of its listing on the NYSE last year. Blackstone’s share price hit a new low yesterday on $17.50 per share and closed at $17.68 at the end of trading in the US.