China's Investment in PPIP

On August 17, 2009, China Investment Corporation (CIC), China’s sovereign wealth fund worth $200 billion, announced that it may invest as much as $2 billion in mortgage-backed securities through the Public-Private Investment Plan (PPIP).

CIC appears willing to invest in the U.S. property market believing it will start to slowly recover later in the year. In addition, CIC seems to view an investment in PPIP as safer than buying into the Term Asset-Backed Securities Loan Facility or TARF.

CIC is in talks with nine of the PPIP-designated managers and is expected to choose which mangers it will use later in September.

For more information about the PPIP program, please see Alex Kane’s recent article “Public-Private Investment Program: Fund Managers Selected; Capital Raising Commences.”