China Investment Corp. closes Toronto office in wake of commodity rout – by Jeff Lewis and Tim Kilaze (Globe and Mail – December 31, 2015)

http://www.theglobeandmail.com/

CALGARY and and TORONTO — For the first time in five years, China’s massive sovereign wealth fund is starting the new year without a Canadian head office, a symbolic exit that underscores the fading fortunes of Canada’s battered resources sector.

China Investment Corp. has closed its Toronto headquarters, shuttering its only Canadian outpost – and its first on foreign soil – after nearly five years in the country.

CIC, which manages $747-billion (U.S.), said in December that it would use a new location in New York to scout for potential investments in the United States and the Americas, including opportunities in Canada.

The move comes as Canadian energy and mining firms reel from tumbling oil and metals prices, crimping returns on some of CIC’s holdings. It was long assumed that China’s investment vehicles had nearly insatiable appetites for resources, and more important, operated with lengthy time horizons that would help it withstand any economic downturn. The decision shows the country’s thinking has evolved.

Several bets by the fund have soured in recent years, prompting it to reconsider its exposure to Canada, said Wenran Jiang, a senior fellow at the Asia Pacific Foundation of Canada. Meanwhile, the former flood of investments by China’s state-owned energy firms has all but evaporated.

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