Stock surge: KKR experiences near 5% increase today
In a surprising turn of events, China Investment Corporation (CIC), the country's sovereign wealth fund, has decided to cancel the planned sale of its stakes in KKR, Carlyle Group, and TPG, among others. The sell-off, initially planned earlier this year as a move to reduce exposure to U.S. businesses, has been called off due to concerns about the perception of retreating from investments and changes in the geopolitical environment.
According to reports, CIC had enlisted the services of US investment bank Evercore to broker the sale. However, the reasons for the sudden cancellation remain undisclosed.
One of the key factors behind this decision appears to be the perception of selling these stakes. CIC feared that such a move could create the impression that it was retreating from the market, which factored into its decision to halt the sale.
Recent diplomatic negotiations between US and Chinese officials have also played a role in this decision. The framework to de-escalate trade tensions, including US signals to remove some technology export restrictions in exchange for China easing rare earth shipment limits, has reduced the pressure on CIC to divest.
This reversal reflects CIC’s strategic balancing act between managing risk exposure to US assets and maintaining a stable investment image amid shifting geopolitical dynamics.
It is worth noting that this decision does not necessarily indicate a shift in the investment strategies of institutional investors. Investors are advised to make their stock buying or selling decisions based on the fundamentals of the companies, rather than solely on the moves of institutional investors.
The cancellation of the planned sale has had a noticeable impact on the stock market. KKR's stock price increased by nearly 5% on Tuesday, a significant jump that can be attributed to the news of a big institutional investor's reversal on a planned sale.
At present, CIC is no longer interested in such a divestment. Potential sellers like CIC might be feeling more confident about the U.S.'s growth prospects due to the fading concerns about the U.S. economy. This could suggest that the U.S. stock market might be seen as a more attractive investment option.
Neither China Investment Corporation nor Evercore responded to Bloomberg's requests for comment on the matter. The reasons or details behind CIC's decision to cancel the sale remain undisclosed.
[1] Source: Bloomberg, "CIC Halts Sale of U.S. Fund Stakes Amid Trade Tensions Easing," 12 May 2025. [2] Source: Financial Times, "CIC U-turn on US fund stakes sale," 12 May 2025.
- Despite the fear that selling its stakes could create the impression of retreating from the market, China Investment Corporation (CIC) has decided not to proceed with the sale of its stakes in KKR, Carlyle Group, and TPG, among others.
- Recent negotiations between US and Chinese officials have played a role in CIC's decision to halt the sale, as the framework to de-escalate trade tensions has reduced pressure on CIC to divest.
- The cancellation of the planned sale has had a noticeable impact on the stock market, with KKR's stock price increasing by nearly 5% on Tuesday as a result of the news of a big institutional investor's reversal on a planned sale.
