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China’s sovereign fund exits Blackstone investment after 11 years amid growing US-China tension

A Blackstone spokesman said the US firm continues “to expand this important relationship as one of CIC’s major asset managers

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Growing trade tensions between the US and China

China Investment Corp (CIC), the state’s sovereign wealth fund has sold off its entire stake in Blackstone Group LP (NYSE:BX), exiting from an investment it had held for 11 years.

CIC’s legal entity, Beijing Wonderful Investments entered into an agreement with the private equity fund in May 2007, paving the way for it to acquire up to 9.99% in Blackstone, just before the private equity firm’s initial public offering.

Selling down stake gradually over the last few years

In 2008, the stake was upped to 12.5%.

In an annual report filed earlier this month, Blackstone said: “As of February 22, 2018, Beijing Wonderful Investments no longer owned any non-voting common units.” No details were given.

In a separate email statement to Reuters on Wednesday, a Blackstone spokesman played down the stake disposal, saying that the US firm continues “to expand this important relationship as one of CIC’s major asset managers.

There have been speculation that the stake sale came as trade tensions between Beijing and Washington continue to escalate, especially with President Donald Trump trying to impose trariffs on up to US$60bn worth of Chinese imports.

However, Reuters quoted a person familiar with the matter as saying that the sovereign fund had been gradually selling its shares over the last few years.

It is believed that CIC held a 4.5% stake in Blackstone as at the end of last  year, the source said.

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