The Financial Times reports that China Development Bank (CDB), one of the country's largest state-owned banks, is "Emerging as an increasingly active overseas investor, using its $10 billion CDB capital fund to take stakes in private equity and hedge funds."

This dovetails with the bank's recent move to join a group of sovereign wealth funds taking a small stake in buy-out firm TPG, which allows the bank to take a stake in the management company and the right to co-invest in deals. These moves suggest a growing comfort with the idea of alternative investments, taking a cue perhaps from sovereign wealth firms around the globe that have toyed with the idea of investing in big private equity firms and/or hedge fund firms.

CDB, through its fund, "Is set to become a cornerstone investor in MP Pacific Harbor Capital, an Asian credit fund that lends to SMEs across Asia in which New York hedge fund MatlinPatterson has joined local lender Pacific Harbor." We could envision a day when China banks become more proactive about all this as it gets more comfortable with the idea of credit funds. In general, it seems like only a matter of time before China banks become more active with the broad panoply of alterative investing via western institutions.

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