(Bloomberg) -- Even by the sometimes opaque standards of Chinese government entities, the inner workings of Gingko Tree Investment are a mystery. 

From the 15th floor of a skyscraper in the heart of the City of London, some 30 employees carry out investment research for its owner, China’s State Administration of Foreign Exchange. Their advice helps direct how a portion of $3 trillion in Chinese foreign reserves is invested.

Despite such backing, the firm keeps a stubbornly low profile. Its UK accounts, the latest of which were uploaded to Companies House this week, offer the only regular insight into its operations. 

Gingko made around £7 million ($8.6 million) of revenue from its advice in 2021 and recorded a £518,000 profit, its accounts show, figures that have shifted little in recent years. It receives a service fee for providing “investment consultation services to its ultimate owner only,” including opportunities on the “alternative investment markets” in the UK and EU. 

Outside of such bare bone filings, Gingko’s penchant in the early 2010s for trophy real estate assets is the only time it regularly drew attention. In 2012, it bought the London headquarters of BlackRock Inc. and two years later the Chancery Lane office housing UK grocer J Sainsbury Plc. Other investments include an office complex in Brussels, which counts the European Commission among its tenants, a stake in Stockholm’s airport rail link and an interest in a Spanish natural gas distributor.

After Brexit, it appears to have lost it taste for such prominent deals. Discretion has been the defining attribute for the firm over the past few years and it is no longer clear whether China still holds an interest in those assets.

It’s a reminder of how the operations of some of the world’s most influential investors — sovereign wealth funds — can operate with little public scrutiny. 

Gingko Tree — like sister entities in Hong Kong, Singapore and the US — has no website and its executives have never spoken to the media. 

Even leadership changes get little attention. Gingko’s 2021 accounts, which note the core management team are all secondees from its Chinese parent, record without fanfare that Jiao Haisong — identified in a 2018 filing as the fund’s chief executive officer — stepped down this summer. Kao Chilei, identified as deputy CEO in a separate filing, was appointed a director at the same time.

SAFE declined to comment for this story.

Four Golden Flowers

Gingko’s low profile is mirrored by SAFE’s other investment arms, which are dubbed the “four golden flowers” by Chinese media. Their role is to reduce China’s reliance on US Treasuries. 

The vehicles are backed by China’s trade surplus, which has swelled from $8.7 billion in 1990 to $900 billion in November, according to Bloomberg data. That trade surplus sent its foreign reserves to $3.1 trillion as of December. That’s down from an all-time high of $4 trillion, reached before a strengthening dollar and falling global asset prices cut its holdings.

Of SAFE’s overseas vehicles, the Singapore arm — Investment Company of the People’s Republic of China (Singapore) Ltd. — was the first to be established in 1992, according to regulatory filings. A Hong Kong entity, SAFE Investment Company, followed in 1997. The Hong Kong investment arm alone has almost $1 trillion of assets, according to data provider SWFI.

The UK and US arms are named after two species of trees mostly native to China. Gingko Tree was established in 2009 and New York’s Rosewood Investment Corp. created in 2012, according to filings.  

Arm’s Length

Unlike China Investment Corp., the country’s $1.2 trillion sovereign wealth fund that’s often seen working closely with Chinese banks in its overseas forays, Gingko mostly works with global banks and asset managers. Gingko directors rarely engage with Chinese banks in the City of London, according to multiple people who’ve worked with the fund and asked not to be identified discussing private matters.

Instead its partners include Australian investment bank Macquarie Group and the Crown Estate, the investment firm that manages the UK monarchy’s assets. Macquarie and Crown Estate didn’t respond to requests for comment.

Still, those China ties are never too far away. The firm shares its City of London digs with a People’s Bank of China’s representative office.

--With assistance from David Ramli, Qizi Sun and Konrad Krasuski.

(Adds executive appointment to ninth paragraph.)

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