China is struggling to find a new head for its $500 billion sovereign wealth fund after two leading candidates declined the job out of fear it would prove a poisoned chalice, according to people with knowledge of the situation.
China Investment Corporation has been without a chairman since March when its former head Lou Jiwei became finance minister. The search for a replacement pears set to continue as the latest nominee, Shanghai vice-mayor Tu Guangshao, is very reluctant to take the job, the people said. They added that Yi Gang, a central bank deputy governor, had already declined the post.
"Those with the right qualifications don't want the job. Those who want the job don't have the right qualifications," said one CIC executive, who confirmed that the fund was having a hard time finding a new leader.
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CIC was founded to great fanfare in 2007 as a vehicle to generate higher returns on China's vast foreign exchange reserves. It has been courted by foreign governments and companies and its investments have spanned the globe, from Brazil to Australia and Russia.
In Europe, it has bought into satellite operator Eutelstat Communications as well as French energy group GDF Suez. Britain has been among the biggest beneficiaries with CIC taking stakes in Heathrow airport and Thames Water, and being invited to invest in London's planned "super sewer".
The concern for those who have been asked to run CIC is that the wealth fund may have nasty surprises on its books and they are afraid it will prove a poisoned chalice if they bear the blame for investments that fare poorly, the people said.
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"CIC scattered a lot of seeds quite hurriedly and widely. It's not clear how many will actually grow into trees and how many of those will bear fruit," said a senior official at a CIC-owned bank who has been briefed on the fund's portfolio.