China Minsheng Investment Capital Co., Ltd (hereinafter referred to as CMIG Capital) recently signed a 30-million-dollar fund contract with Elite International Investment Fund, a member of the China Real Estate Chamber of Commerce, collaborating to jointly develop real estate in the United States.
Named CMIG Jingrui Investment Fund, the fund is another business exploration and strategic step into the overseas markets for CMIG Capital, following their investment in the UK.
On June 15, 2015, CMIG Capital signed a strategic cooperative agreement with Savills Investment Management to establish a joint venture fund investment in the UK, not only to develop real estate in Great Britain, but also to cooperate in investment and asset management in a global context.
The cooperation with CRECC marks a step forward for CMIG Capital in its global strategic development by setting up a second overseas investment fund and completing a strategic plan that intersects Europe and North America.
Mr. Liu Tianlin, President of CMIG Capital, analyzed the reasons why CMIG Capital would invest in the U.S. real estate industry. First of all, the mature real estate market in the U.S. has a high expected rate of return, which would provide steady cash flows for the fund. Another reason is that CMIG Capital has faith in the long-term development of the U.S. real estate industry, believing that the fund will be a great channel to connect domestic and overseas asset allocation.
According to GDP and existing-home sales statistics from reports made public by the United States Department of Commerce in 2015, the U.S. economy has begun a powerful comeback, with GDP increasing by 3.9% in 2015. The existing-home sales also greatly increased in July, having risen six times in the past seven months. All these figures have proven that Mr. Liu’s analysis was well-founded. The real estate industry in the U.S. will continue recovering, and investors will have more faith in the U.S. economy.
Moreover, the latest statistics show that main-stream pensions, industrial funds, and insurance funds are now flowing to second-tier cities in the U.S., and as the trend becomes more evident, market liquidity will be greatly enhanced. In the meantime, since the market has expected further appreciation of the US dollar, international investors will invest more in dollar assets.
In fact, it is CMIG Capital’s initial vision to be able to help Chinese companies enter the global market by using domestic and international resources and markets. With this vision in mind, CMIG Capital is striving to plan its overseas investment layout. The strategic step in the U.S. market is another important move for CMIG Capital to promote its global strategy.
When looking at the future of CMIG Capital, Mr. Liu said, “We will continue to actively expand our overseas market, guide domestic capital to reasonably avoid risks, look for investment opportunities around the world, and establish CMIG Capital as a platform to connect domestic and international asset allocation.”