Tuesday December 2, 01:28 AM
RPT-UPDATE 1-Ex-UBS China chief to head CIC unit -source
By George Chen
HONG KONG, Dec 1 (Reuters) - China Investment Corp, the country's sovereign wealth fund, has appointed a former China head of investment bank UBS AG (Virt-X: UBSN.VX
- news) as its head of alternative investments, a source with direct knowledge of the matter told Reuters on Monday.
Zhou Yuan, who was UBS' senior banker in China between 1994 and 1998, will be based in CIC (Paris: FR0005025004 - news) 's Beijing headquarters, said the source who declined to be identified before an official announcement is made.
As head of alternative investments, Zhou will be mainly responsible for three areas: direct investments, real estate funds and non-real estate private equity funds, the source said.
Zhou will directly report to Gao Xiqing, the president of CIC, and he will become a member of its top management team with power to approve or veto major deals involving investments in foreign funds or assets, the source said.
Zhou left UBS in 1998 to take a senior position at Hong Kong Exchanges and Clearing Ltd (0388.HK - news) . He left the bourse operator in 2000 and since then has held senior positions at a number of organisations. He is still an advisor to the asset management arm of State Street Corp (NYSE: STT - news) .
CIC IS HIRING
Zhou's job is one of several new appointments of senior positions at CIC in recent weeks as the investment agency, which was set up by the Chinese government last year to earn higher returns on $200 billion of China's foreign exchange reserves, is keen to strengthen its management and to expand its investments abroad, said the source.
'He is well known to both Chinese and foreign bankers and he understands Chinese business culture as well as how to deal with business relationships in Western markets, in particular in the U.S.,' said another source who had also been briefed on Zhou's appointment.
'That's exactly the type of person that CIC is looking for,' he added.
CIC has attracted intense scrutiny at home over its investments in U.S. financial institutions which have been battered by the credit crisis, with its stakes in private equity house Blackstone Group and Morgan Stanley (NYSE: MS - news) diving in value.
Zhou is a son of Zhou Nan, former Hong Kong head of China's Xinhua News Agency, who played a key role for Beijing in negotiations with the UK government related to the hand-over of Hong Kong.
A representative at CIC declined to comment, while Zhou could not be immediately reached for comment.
(Editing by Jon Loades-Carter) Keywords: CHINA CIC/APPOINTMENT
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