Two Key Decisions for China’s Sovereign Fund Harvard Case Solution & Analysis

The China Investment Corporation (CIC) was China's sovereign wealth fund (SWF), confirmed with $200 billion of registered capital in September 2007 to diversify China's foreign exchange holdings and increase risk-adjusted returns on those assets. CIC was unusual in that it had a strictly commercial orientation and market-driven investment mandate to put money into foreign assets but also served as the parent company of a 100 percent-owned subsidiary company, Huijin, that invested only in key state-owned financial institutions in China.

Also, the fact that CIC was a SWF presented more comprehensive political challenges for itself, its investor the Chinese government, its direct investments and their governments, and also the world market generally. This case involved two choices CIC faced in early 2011: the first was how to best and most correctly pronounce the relationship among CIC, Huijin, and Industrial and Commercial Bank of China (ICBC) to the Federal Reserve Board (the Fed) so that ICBC could expand its company in America while exempting CIC and Huijin from specific types of Fed supervision. The second was whether to make a board director to Morgan Stanley, a company in which CIC had directly invested close to $6 billion and held 9.9 percent possession. Also, the case discussed SWFs normally and their rights and obligations to the global community.

Two Key Decisions for China's Sovereign Fund Case Study Solution

PUBLICATION DATE: June 28, 2011 PRODUCT #: 311137-HCB-ENG

This is just an excerpt. This case is about FINANCE & ACCOUNTING

Share This

SALE SALE

Save Up To

30%

IN ONLINE CASE STUDY

FOR FREE CASES AND PROJECTS INCLUDING EXCITING DEALS PLEASE REGISTER YOURSELF !!

Register now and save up to 30%.