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 After getting in at the top, China's sovereign wealth fund also figures it may as well try to get in again at the bottom. China Investment Corp. is reportedly close to investing $500 million into a Blackstone Group LP (NYSE:BX) hedge fund unit, The Wall Street Journal is reporting. The CIC invested $3 billion for a 9.9% stake in Blackstone right before the private equity firm's 2007 IPO, only to see the value of its stake get crushed as the credit crisis set in and large LBO activity ground to a halt. CIC later increased its stake to 12.5%. Shares of Blackstone closed at $11.31 on Thursday, off more than 60% from their IPO price of $31. The investment is part of a wider strategy by CIC to move more aggressively into hedge funds on the hunch that the beaten down sector's worst days are behind it. According to Bloomberg, Felix Chee, an adviser to China's $200 billion sovereign wealth fund, said the CIC "would like a core of single-manager funds and fund-of-funds." The entrance of a deep-pocketed investor like CIC would be a dream come true for the hedge fund industry, which has been ravaged by negative portfolio returns and investor withdrawals. Not only could CIC replenish the capital for some hedge funds, but it could help the wider industry by signaling that it's a smart place to put capital again. - George White See WSJ story (subscription required) See Dealscape post on CIC investing in Blackstone See Bloomberg story
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