Sovereign wealth funds keen on China, despite regulatory headwinds

Sovereign wealth funds remain keen on China, despite regulatory crackdowns, planning standalone investment strategies and piling into venture capital and real estate, according to data and analysts.

Investors in China have been shaken in recent weeks by a slew of regulations targeting sectors ranging from gaming to education.

Sovereign wealth funds are not immune but, given their long-term investment outlook, they are not expected to pull back from a bet that China will provide the engine of global growth for years to come.

“Long-term investors like sovereign funds won’t adjust their allocation to the second-largest economy down to zero overnight,” said Winston Ma, former managing director of China Investment Corp, Beijing’s own sovereign fund. “Their strategic asset allocation cannot be that tactical.”

Norway’s fund, the world’s largest, has 4.5 per cent of all investments in China and Hong Kong.

Singapore’s Temasek Holdings in June bought 33 million American Depository Receipts in Didi Global Inc, before regulators announced a probe of the ride-hailing company that the city of Beijing is now considering taking under state control, according to a Bloomberg News report on Friday Several funds have positions in giant Alibaba Group Holding, whose shares are down 30% year-to-date, and New Oriental Education & Technology Group Inc, which has tumbled 88%.