In 2023, the global macroeconomic paradigm shift continued to evolve. Persistent high interest rates and inflation profoundly impacted market pricing. Global equity markets showed significant divergence, with gains primarily concentrated in top-tier tech stocks. The global bond market experienced wide fluctuations, while private market asset transactions generally cooled. These conditions heightened challenges in risk diversification and alpha generation for our total portfolio.

In this volatile environment, CIC maintained its strategic focus as a long-term institutional investor while prudently navigating the macro paradigm shift. Closely monitoring market developments, we continually refined our asset allocation and portfolio construction, implementing timely adjustments and optimizing our investment footprint. These efforts enhanced our total portfolio's resilience and quality.

CIC systematically bolstered its proprietary investment capabilities, focusing on enhancing our public market expertise while maintaining a measured approach to private market investments. We achieved further improvement in our investment management and support services.

Despite significantly elevated global inflation, CIC successfully achieved its main operating targets set for the year, delivering overseas investment returns above the Board's long-term target. Our total portfolio has thus maintained an upper-middle tier ranking among peers for five consecutive years.

Public Market Investments: Refining Strategies, Amplifying Results

CIC adapted nimbly to market conditions, maintaining a disciplined, selective approach. We streamlined our public market investment footprint, enhancing the rigor and coherence of portfolio construction. To enhance investment effectiveness, we strengthened coordination between active and passive strategies and refined our approach to externally managed investments.

In public equities, we enhanced our systematic approach and portfolio analysis capabilities, harmonized investment strategies, and optimized our footprint. We assessed managers' performance and adaptability to emerging paradigms, making proactive adjustments as needed.

We intensified thematic research, especially in sustainable investing, and piloted new strategy construction approaches. We expanded and elevated our proprietary investment capabilities.

In fixed income and absolute return investments, we enhanced active management of our proprietary bond portfolio and refined our passive investment approach. We improved operational efficiency through targeted asset research and manager evaluations.

We enhanced our hedge fund portfolio construction to improve resilience across interest rate and inflation cycles, further strengthening our ability to generate returns with low correlation to public markets.

We comprehensively reviewed our multi-asset risk allocation strategies and steadily advanced our proprietary CIC macro factor portfolio.

Private Market Investments: Steady Growth, Enhanced Capabilities

CIC maintains a balanced portfolio, with comparable allocations to public and private markets. Responding to evolving macroeconomic conditions, we've refined our investment approach, expanding our use of collaborative investment structures including the strategic partnership accounts and co-investment accounts.

We've increased our focus on high-potential sectors including renewable energy and private credit, while cautiously exploring opportunities in emerging markets.

Despite the slowdown in fundraising and deal activity, we continue to make calculated investments in private markets while steadily enhancing our capabilities in this area.

In private equity and private credit, we strategically deployed capital, onboarding new managers and re-upping selectively, while optimizing our allocations. We conducted thorough market research to identify compelling opportunities.

Our private equity investments focused on key sectors including Technology, Media and Telecommunications (TMT), healthcare, consumer services, advanced manufacturing, and technology-enabled financial and business services. We expanded our co-investment activities and deepened our sector expertise, actively pursuing thematic opportunities in climate change, renewable energy, software, etc.

In private credit, we conducted in-depth market analysis to capitalize on opportunities in the high-interest rate environment, strengthening our private credit investments and optimizing portfolio allocation. Our approach included cross-sector deal sourcing, multi-faceted due diligence, and innovative strategies such as equity-debt hybrid investments.

We further leveraged our value creation capabilities to deepen partnerships and enhance alignment with our partners. During periods of market volatility, we intensified post-investment management and enhanced portfolio monitoring granularity.

In real estate, we focused on high-growth sectors such as logistics, deepening partnerships with top-tier managers, and prudently deploying capital. We optimized our portfolio across sectors and regions to enhance adaptability, resilience, and growth potential in the persistent high-interest rate environment.

In infrastructure, we maintained our dual focus on post-investment management and closing new deals. Despite high inflation, elevated interest rates, and economic deceleration, our infrastructure assets delivered stable growth and solid returns, demonstrating their resilience as inflation hedges. We conducted in-depth research on sectors with strong upside potential, refining our strategy to increase allocations to renewable energy and data centers. We also further balanced our geographic footprint to diversify investment risks.

In energy transition, we expanded our presence with a strong focus on ESG investment, while forging innovative partnerships with managers and steadily increasing our exposure to green energy.

In agribusiness, we maintained our research-driven approach, deepening our focus across the entire value chain. We cultivated our investment ecosystem through long-term partnerships with leading investors in the sector. We collaborated on multiple deals with domestic and international industry leaders, enhancing value creation and synergies while bolstering our brand recognition and competitive advantage in the sector.

In our bilateral funds, we maintained steady investment, built cross-border ecosystems, and leveraged China's market to enhance investee company growth and boost returns. We deepened country-specific expertise to tap industrial synergies and drive high-quality investment and industry partnerships.

Global Synergies: CIC's Overseas Offices in Action

CIC International (Hong Kong) prudently manages portfolio risks in public markets while actively responding to market changes. It closely monitors global and regional dynamics leveraging Hong Kong's geographical and information advantages, and has deepened its research capabilities in green and low-carbon sectors, as well as specialized, innovative, and emerging industries. With a strategic focus on the Greater Bay Area and a reach extending across Asia-Pacific, it assists the headquarters with deal sourcing and post-investment management to form effective synergies.

The New York Representative Office serves as a crucial link for communication, outreach, and support. It actively engages with local business partners and industry peers, studies economic and investment market trends, and provides in-depth market insights. The office supports headquarters' investment teams with post-investment management and on-site due diligence for deals across the Americas, bridging global strategy with on-the-ground expertise.