CIC to invest $1b in China-Russia fund

BEIJING, Oct 11 (Reuters): China Investment Corp will invest $1 billion in a joint Russia-China Investment Fund to be set up in partnership with a Russian state vehicle to promote direct investment, the head of Russian state development bank VEB said Tuesday. VEB Chairman Vladimir Dmitriev told reporters travelling with Prime Minister Vladimir Putin to Beijing that, under a memorandum to be signed later, the state-backed Russian Direct Investment Fund (RDIF) would also commit $1 billion. The investment horizon for the fund would be around seven years, and the fund would seek outside investments that would be four times the original capital commitments of the two state investment bodies, Dmitriev said. "This fund will be above all oriented towards financing projects of common interest that will strengthen Russia-Chinese business relations," Dmitriev said. The announcement marks the first outside promise to invest with the newly created RDIF, which will be capitalised with $10 billion in state cash over the next five years. The RDIF's mission is to co-invest in private equity plays on a risk-sharing basis, with foreign partners required at least to match its investments, dollar for dollar.