The steep paper losses that China has suffered on its $3 billion investment in Blackstone Group will not deter its embryonic sovereign wealth fund from making further investments in private equity and hedge funds, according to a senior official, Reuters reports.
Shares in Blackstone closed on Friday at $24.08, down 22.3 percent from its $31 debut price in June.
The poor performance has sparked criticism of the investment within China, which bought its non-voting share at a 4.5 percent discount and agreed to hold onto it for at least four years.
“The company (Blackstone) is currently excellent in terms of both quality and earnings performance,” says Jesse Wang, vice chairman of Central Huijin, the central bank’s investment arm. “If you are going to invest in a private equity firm, there probably is no better company.”
Blackstone, which is also active in hedge fund investing, asset management and corporate advisory, last Monday reported that net income in the second quarter more than tripled from a year earlier to $774.4 million.