Visible face of CIC investment

Although there is no firm yardstick to gauge its real impact, China Investment Corp has in many ways been the most representative face of Chinese investment in Europe. Apart from its regular activities such as equity and other investments, the fund has also played a key role by teaming up with other sovereign wealth funds for joint investments on the continent.

Mogden sewage treatment works in the southwest of London, run by Thames Water Utilities Ltd. CIC bought an 8.86 percent stake in the company in January last year.Provided to China Daily

Fund officials say the multi-pronged approach has helped the CIC post reasonable returns on investment, despite the volatile and often deteriorating financial climate in Europe. As part of that game plan the CIC bought equity stakes in European utility companies, sectors seen as risky and unattractive in the short term.

Last year, the fund invested $2.3 trillion in infrastructure construction projects across Europe, making it the highest investment outlay for the region since the CIC was set up in 2007. CIC's equity purchases from the European markets rose to 27 percent last year from 20.6 percent in 2011. The proportion was 21.7 percent in 2010 and 20.5 percent in 2009.

A more friendly investment environment compared with other developed economies and the slower-than-expected recovery from the debt crisis has made Europe an ideal destination for the CIC as it constantly looks for global opportunities to preserve and increase the value of part of China's more than $3.5 trillion foreign exchange reserves.

The company's largest deal in Europe has been the acquisition of a 10 percent stake in the firm that owns London's Heathrow Airport for about $726 million. The deal was clinched in November, when the Spanish company Ferrovial sold a part of the shares of the Heathrow Airport Holdings Ltd that was previously known as BAA Ltd. Ferrovial, which owned nearly half of Heathrow Airport Holdings before, now controls 44.27 percent of the shares.