The head of China Investment Corp.’s Toronto office is stepping down as the Chinese sovereign wealth fund broadens its North American investments after suffering losses in Canada, said two people with knowledge of the matter.
Felix Chee, who was appointed in January 2011 as chief representative for CIC’s first international office, will leave when his term ends this month, according to the people, who asked not to be identified as they weren’t authorized to speak publicly about the plans. Chee didn’t return calls to his Toronto office and emails seeking comment.
The $575 billion sovereign wealth fund may expand its North American presence with a U.S. office, while keeping its Toronto location open, said one of the people. The Wall Street Journal reported yesterday that the CIC may open an office in New York to capitalize on the recovering U.S. economy.
CIC set up in Toronto to take advantage of the country’s growing need for investment in its mining and energy sectors. In addition to Chee, CIC relocated Managing Director Winston Wenyan Ma to Toronto to serve as deputy representative in Canada. Ma will remain with the fund, one person said.
Opening the Canadian office was part of an effort by Beijing-based CIC to “explore investment opportunities and expand its global presence,” according to the fund’s 2012 annual report. The fund’s first major investment in Canada was $1.5 billion in Teck Resources Ltd. in July 2009.
Several of the fund’s investments in Canada have soured, even as global stock prices rallied. The fund reported a 10.6 percent return on its overseas investments last year, according to its annual report released in July.
Sunshine Oilsands Ltd., in which CIC holds an 8 percent stake, has plunged by 49 percent this year to 21 cents in Toronto. The Calgary-based company, which also trades in Hong Kong, has struggled to get financing to develop its 1.2 million acres of oil leases in Alberta.
Penn West Petroleum Ltd., another CIC-backed company, has fallen 18 percent this year and reached a 14-year low last month on falling production and rising costs. Teck Resources, a Vancouver-based mining company, has tumbled 32 percent this year. At C$24.45, Teck still trades above CIC’s purchase price of C$17.21 a share in 2009.
Chee, a former investment executive for Toronto-based insurer Manulife Financial Corp., is a Teck director. Canada’s Standard & Poor’s/TSX Composite Energy Index has gained 6.1 percent in 2013.
The sovereign fund’s U.S. investments have fared better than its Canadian stakes. Morgan Stanley, the New York-based investment bank, has risen 60 percent. AES Corp., the Arlington, Virginia-based utility, has gained 30 percent while money manager Blackstone Group LP has almost doubled.