Chinese sovereign wealth fund CIC signs alliance with Eurazeo and BNP Paribas

At the head of 940 billion dollars, the financial arm of the Chinese state signed Monday evening at the Elysee Palace with the investment company and the bank an agreement to deploy 1 to 1.5 billion euros in companies French women wanting to develop in China.

On the occasion of the visit of Chinese President Xi Jinping, the Chinese sovereign fund CIC signed a partnership with Eurazeo and BNP Paribas to invest 1 to 1.5 billion euros to invest in French companies that want to embark on the second largest economy in the world.

The Chinese president’s state visit to France also drains his contract for French finance. The sovereign fund China Investment Corporation (CIC) signed on Monday at the Elysee Palace an agreement with the investment company Eurazeo and the bank BNP Paribas to invest in French companies wishing to develop in China.

This alliance will invest 1 to 1.5 billion euros in France and continental Europe with third-party, European and Asian investors. CIC has already created comparable alliances in the United States, with Goldman Sachs, or in the United Kingdom, with HSBC bank and the Charterhouse Capital fund. The model is supposed to be reproduced in Germany or Italy.

Active in China for seven years

“We are building a very long-term strategic alliance”, welcomes Eurazeo’s director, Virginie Morgon. The three partners will together mobilize 350 to 450 million euros out of the total targeted for this Franco-Chinese cooperation fund, called the “friendship fund”. CIC, which manages some $ 940 billion, plays a central role.

“We are proud to have been selected from among major French investor funds », Emphasizes Virginie Morgon, who rubs shoulders with the leaders of the Chinese conglomerates Fosun and HNA. Present in Shanghai since 2012, Eurazeo benefits from its network in China, which has enabled it to forge alliances on site for companies in its portfolio, such as Planet and Sommet Education.

Eurazeo has also invited the Sino-American investor IDG Capital and the Franco-Chinese Cathay Capital to participate in Moncler, the Italian manufacturer of down jackets (from which it has just left). The company has also invested alongside the Chinese fund Primavera in the American education specialist WorIdStrides.

Independence in governance

What convince CIC. For three years now, the sovereign fund, a long-time partner of Engie, has wanted to become a reference shareholder of large French groups. An investor in a multitude of funds around the world, CIC has now entered into a strategy of direct relations with managers. In 2015, the Chinese financial arm signed an agreement to mobilize 1 billion for the projects of Greater Paris, but these have fallen behind schedule.

Despite the questions raised by the rise of Chinese investment controls in Europe, Virginie Morgon is calm. “We will invest through a dedicated vehicle and the decision to invest itself will be based on the free will of the investment teams, notably Eurazeo Capital and Eurazeo PME, depending on the Chinese angle. A real independence has been enshrined in governance ”, indicates the leader, who has just doubled the size of her group.

BNP Paribas ambitions

For BNP Paribas, this alliance reinforces its ambitions in China. At the end of 2018, the bank obtained the license from the Chinese authorities allowing it to lead as a leader in the issues of “panda bonds”, these bonds denominated in yuan issued in mainland China by foreign issuers.