The Chinese Investment Corporation (CIC) is partnering with private equity firm Blackstone to purchase an interest in the £1.4 bn (EUR 1.6 bn) property loan portfolio being sold by the Royal Bank of Scotland.

China's $409 bn sovereign wealth fund has agreed a deal to purchase a 12.5% stake in the equity of the loan portfolio, according to a news report in PropertyWeek. CIC, which also owns a 10% stake in Blackstone, is believed to be making an investment of about £50 mln.

Blackstone will buy a minority position but will assume the management of the portfolio, which includes 35 performing and non performing loans with a high loan-to-value ratio of more than 90%.

The loans, with a face value of £1.4 bn, are believed to be sold for a 30% discount, or a price of around £1bn. The deal - nicknamed Project Isobel - involves roughly 60% of debt provided by RBS and other lenders. Blackstone will take a 25% stake, amounting to around £100 mln, and CIC will take half this stake. Other investors will participate and make up for the remaining £250 mln of needed equity.