China Sovereign Fund to Shed $1 Billion in American PE Assets

In a move that reflects both tactical portfolio realignment and growing global financial tension, China Investment Corporation (CIC), the country’s sovereign wealth fund, is preparing to sell approximately $1 billion of its U.S. private equity investments on the secondary market. The divestment, which involves assets managed by eight American firms including Blackstone Inc. and Carlyle Group, is being facilitated by U.S. investment bank Evercore and is expected to close by the end of June 2025.

Though the precise value and deadline remain fluid, sources close to the matter say the sale is part of CIC’s broader effort to optimize its massive $1.33 trillion portfolio. The investments, originally made in 2016 and 2017, are nearing the end of their typical 10-year PE cycle. Yet the timing also raises questions, as the decision comes amid escalating trade tensions and increased regulatory scrutiny between Beijing and Washington. “The move…comes as geopolitical and trade tensions, especially between Beijing and Washington, have triggered market turmoil and uncertainty” (Wu, 2025).

For years, the United States has been CIC’s largest investment destination, with U.S. private equity and public equities comprising a substantial portion of its holdings. According to the fund’s 2023 annual report, U.S. equities alone made up 60.29% of CIC’s overseas public market exposure, while public equities in total accounted for 33.13% of its overall portfolio. Additionally, 64% of CIC’s assets are currently managed externally, highlighting its reliance on global partners.

CIC’s decision may also signal a deeper strategic shift. Last week, the Financial Times reported that Chinese state-backed funds, including CIC, were scaling back or freezing new investments in U.S. private equity firms due to increasing regulatory barriers and national security concerns. While CIC has not commented directly on that report, this $1 billion sale could be viewed as an early indicator of broader decoupling between the world’s two largest economies in financial markets.

The divestment also comes as the secondary market for PE assets is booming. Deal volume in the secondary market reached a record $160 billion in 2024, driven in part by PE funds and limited partners unable to exit investments through traditional methods such as IPOs or mergers and acquisitions. Potential buyers for CIC’s stake reportedly include other sovereign wealth funds, private investors, and secondary-focused asset managers. Singapore’s Government Investment Corporation (GIC) is said to be among those expressing interest, though it has declined to comment.

Despite turbulent markets and shifting international policies, CIC’s long-term performance has remained solid. Its annualized “10-year net return stood at 6.57%” at the close of 2023, while its “cumulative net return since inception was 6.23%” (Wu, 2025). Yet as sovereign funds like CIC reassess their exposures and realign priorities, their decisions are no longer just about profits, they’re becoming statements about positioning in a complex geopolitical chessboard.

Whether CIC’s sale of U.S. private equity is primarily a financial decision or a symbolic gesture remains uncertain. However, the move underscores how closely intertwined global capital markets have become with diplomatic strategy, and how institutional investors are increasingly forced to navigate not just markets, but politics.

Sources

Wu, Kane. “Chinese Sovereign Fund CIC to Sell $1 Billion of US Private Equity Investments, Sources Say.” MSN, 1 May 2025, https://www.msn.com/en-us/money/companies/chinese-sovereign-fund-cic-to-sell-1-billion-of-us-private-equity-investments-sources-say/ar-AA1DVb45.