Shakeup at the CIC

Li Keping becomes new CIO.

July 13, 2011

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liThe China Investment Corporation has been reorganizing again, and this time it looks to be the C-Suite that’s set for a renovation. In addition to announcing a new Board of Supervisors, the Chinese sovereign wealth fund has formally appointed a new Chief Investment Officer. Li Keping will replace Gao Xiqing as the CIC’s top investor (Gao will stay on as Vice-Chairman and President). In my opinion, this is very good news for the CIC.

Until recently, Li was Vice-Chairman and CIO of China’s $132 billion National Social Security Fund. Importantly, he became CIO of the NSSF back in 2001, which means he now has over a decade of ‘CIOing’ under his belt. In addition, much of his time at the NSSF was spent building the fund from the ground up (his appointment began only a year after the fund was established in 2000). So, Li is rightly seen as the key architect of the NSSF’s increasingly sophisticated investment strategy.

It’s clear (at least to me) that the CIC is getting a solid CIO with a long investment track record. And, if you’ll permit a bit of provocation, it’s probably about time, as the other key executives at the CIC — while brilliant and accomplished — aren’t investors:

  • Gao Xiqing (previous CIO) is a Duke-trained lawyer. His claim to fame was helping to build the Chinese stock market.
  • Lou Jiwei has an MA and PhD in economics. His career was at the Ministry of Finance (where he ended up as Vice Minister).
  • Jin Liqun was a VP at the Asian Development Bank and a Deputy Minister of Finance in addition to working on the Monetary Policy Group of the PBC.

In short, none of these guys are pure investors. So, with the appointment of Li, the CIC will be filling an important gap in its leadership team; it’s getting a guy that has been an investor for over a decade. And, as an added bonus, Li has already built a successful Chinese SWF once, so he can probably be quite useful in doing it again. I think the CIC will greatly benefit from Li over the long term.

So here’s the new face of the CIC. Get used to seeing it.

This post originally appeared on the Oxford SWF Project

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