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China’s sovereign wealth fund is in talks to back a roughly $800 million investment vehicle that will take stakes in Middle East companies, the latest sign of the growing trade ties between Gulf oil exporters and the world’s second biggest economy.

China Investment Corp. is working with Investcorp Holdings to put money into the Bahrain-based company’s Gulf-focused pre-IPO fund, according to people familiar with the matter. CIC’s investment in the fund, along with that of other major sovereign wealth funds from Abu Dhabi and Saudi Arabia, could be announced as soon as this month, the people said, asking not to be identified discussing non-public information.

The partnership with Investcorp is part of CIC’s plans to look at more deals in the Middle East, the people said. The investment by CIC, which manages about $1.3 trillion, and other sovereign funds has led Investcorp to increase the size of the fund from an initial target of $500 million and the company is also planning to broaden the fund’s focus to investing across the Middle East and Asia.

CIC didn’t respond to a request for comment sent outside of normal office hours. Investcorp declined to comment.

China is also the top buyer of Middle East oil, but the country has increasingly looked to deepen its ties with the Middle East. Those relations got a boost after President Xi Jinping attended a regional summit in Saudi Arabia in 2022.

Investcorp, the Middle East’s biggest alternative asset manager, has assets under management of about $50 billion, according to its website. It is expanding in Asia and reportedly partnered with the private equity arm of the Fung brothers’ family office in 2022 to set up a $500 million fund to invest in mid-cap companies across China’s Greater Bay Area.