China Investment Corp. is close to purchasing a 12.5% stake in some timber assets in Canada from an infrastructure affiliate of Brookfield Asset Management Inc. for about $100 million, according to people with direct knowledge of the matter.
The move marks the latest effort by the Chinese sovereign-wealth fund to step up its investment in assets that could help shield its giant overseas portfolio from rising inflation risks.
The timber assets are part of closely held Island Timberlands, which is jointly owned by Brookfield and other institutional investors and consists of about 634,000 acres of freehold timberlands mainly on Vancouver Island, the people said. Brookfield Infrastructure, which is publicly traded, told investors in July that it planned to divest some of its timber and other assets.
“In the current low interest-rate environment and given strong interest in infrastructure assets from institutional and strategic buyers, Brookfield Infrastructure believes that there could be opportunities to monetize these assets and reinvest capital in assets that offer superior returns,” the company said at the time.
CIC has been shifting toward long-term, hard assets in foreign markets that can throw off steady cash flow. Like other investors, CIC is looking to protect its portfolio from rising inflation risks potentially posed by stimulus measures in Western countries.