In January 2011, the CIC announced to much Canadian fanfare that it was opening its first foreign office in Toronto. Rumors had pegged the CIC to be considering London and New York. Toronto hadn’t been mentioned, so it was big news for Canada. As Toronto’s Globe and Mail reported:
“China is preparing to step up its investments in Canada with the opening of a Toronto office for its deep-pocketed sovereign wealth fund, representing the first permanent foreign location for the state-backed institution…”
But was the Toronto office really the fund’s “first permanent foreign location”? Imagine my surprise this morning when I read the following in the WSJ:
“Chinese sovereign wealth fund China Investment Corp. opened up offices at 350 Park Ave. in 2009 and last year doubled its space in the building, said Mr. Kraut, who brokered the lease.”
Hold on. CIC has had offices in NYC since 2009? The fund doesn’t disclose any New York locations (which suggests to me that Mr. Kraut won’t be brokering any new leases for the CIC any time soon). But some snooping does show that 350 Park is indeed home to something called “CIC Advisors Inc.” And the building is also home to China Construction Bank, which is majority owned by the CIC. Perhaps the CIC did set up its first foreign office in NYC two years before the Toronto office. But why keep this a secret? It’s all a bit odd.
My ‘occam’s razor’ take: The NYC office (while it may have “doubled in size”) is probably just a small outfit that exists for back office functions and custodial services. In other words, it’s all about meeting American regulatory requirements, so it doesn’t fit in with the CIC’s definition of an “overseas representative office” in that it’s not an investment office. The Toronto office is an investment office, which is why it was such a big deal.