China’s State Administration of Foreign Exchange (SAFE) will invest more than US$2.5 billion in US private equity firm TPG, the Financial Times reported, citing people familiar with the situation. It could be the largest investment ever made in a private equity firm. SAFE’s money will go into a new TPG fund worth about US$17 billion, although it has not yet closed. The investment reflects a growing inclination among sovereign wealth funds to invest through private equity firms rather than buy stock in companies directly and risk a political backlash. For their part, the private equity firms welcome the injection of cash at a time when other institutions are cutting back. SAFE, which oversees the bulk of China’s US$1.6 billion in foreign exchange reserves, has been looking for investments but tries to keep a low profile.