The Chinese government’s main sovereign wealth fund yesterday said it had bought a 10 percent stake in the operator of London’s Heathrow Airport, expanding its investments in British infrastructure.
China Investment Corp (CIC, 中投國際投資) gave no financial details, but Ferrovial, the Spanish company that owns 49.99 percent of Heathrow Airport Holdings, said the fund paid other shareholders a total of US$725.8 million to acquire its stake.
CIC was created in 2007 to manage a portion of China’s multitrillion-dollar foreign reserves in hopes of earning a higher return. Its early investments were mostly small stakes in publicly traded companies to avoid stirring political opposition abroad, but the fund has begun making bigger direct investments.
Ferrovial said it sold a 5.72 percent stake in Heathrow Airport Holdings to a CIC subsidiary, Stable Investment Corp, for ￡257.4 million (US$415.2 million). Ferrovial said Stable also acquired shares from other owners for ￡192.6 million at the same time for a total 10 percent stake in the company.
The fund’s chairman said in November last year it wanted to start investing in the US and Europe in energy, water, transportation and other infrastructure projects.
In January, CIC bought 8.7 percent of London’s water company, the Thames Water Utilities Ltd, for ￡276 million.
CIC has also made direct investments in French oil and gas producer GDF Suez, Russian miner Polyus Gold, Australian toll road operator Horizon Roads, and energy, shipping and other companies in South Africa, Canada, Vietnam and Brazil.