Collin Lau, the global head of real estate at China Investment Corporation (CIC), is preparing to switch roles and become European head of private equity at the $400 billion sovereign wealth fund, PERE has learned. Patrick Wu, a director within CIC’s real estate division, has been appointed as Lau’s successor and will take over full-time after a transitional period.
Lau’s switch to CIC’s private equity division marks something of a return to the asset class for him. He joined the state fund in February 2009 from Starr International Asia, part of private financial conglomerate Starr International Group, where he spent three years leading its Asia private equity platform. He also was previously managing director and chairman of the portfolio management committee of Baring Private Equity Asia, the Hong Kong-based private equity firm that recently formed a real estate investing platform of its own.
Lau is taking charge of executing CIC’s private equity investment strategy in Europe, which is understood to be targeting direct investments and co-investments alongside conventional commitments to private equity funds. CIC declined to comment.
Wu joined CIC in March 2008 and is one member of CIC’s six-strong real estate division. He previously worked for more than seven years at North Carolina-based Wachovia, the financial services firm acquired by Wells Fargo in the same year. US-educated, Wu has experience in global real estate debt investments, particularly the RMBS and CMBS markets.
Lau’s almost three-year tenure leading CIC’s real estate division is understood to have been unusually long for a department head at the sovereign fund. Most department heads are thought to rotate more frequently.
Nonetheless, during his time at the helm, Lau led CIC’s participation in various high-profile transactions, including the recapitalisations of US mall giant General Growth Properties last year and London's Canary Wharf landlord Songbird Estates in 2009, as well as the privatisation of ING Industrial Fund in Australia at the turn of the year.
While essentially an investor driven to generating long-term, recurring incomes from prime real estate, many of CIC’s investments during Lau’s time produced high IRRs as a result of putting to work the firm’s ample capital sources in the immediate aftermath of the start of the global financial crisis.
CIC said in its annual report in July that it had “essentially fully invested” its initial $200 billion of state equity and reportedly has been close to being granted a second tranche of capital, although that has not yet been announced. In the report, CIC said the total value of its overall assets had grown to $409.6 billion in 2010 from $332.4 billion the year before. During that time, it reduced its cash holdings significantly in favour of investments in long-term assets, including both real estate and infrastructure. As at 31 December 2010, CIC’s exposure to alternative investments stood at 21 percent of its total assets.
To read PERE’s feature on CIC’s real estate platform, which includes comments on its strategy from Lau, click here.