CIC invests in Morgan Stanley

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China Investment Corp (CIC) has bought a 9.9 per cent stake in Morgan Stanley, it has emerged.

The wealth fund, which was launched by China in a bid to invest in markets in other countries, paid $5 billion (A$5.8 billion) for equity units in the investment bank.

Morgan Stanley announced the fundraising news as it posted a net loss of $1.54 billion over the fourth quarter of the year.

Commenting on the sale to the Chinese fund, the bank's chief executive John J Mack said the agreement is "an important step" in increasing the flow of capital between China and the US.

"The investment from CIC will help to strengthen our deep ties in those growth markets and ensure that Morgan Stanley has the resources necessary to pursue growth opportunities globally," he continued.

The CIC made its first investment in non-voting shares in May, when it bought a $3 billion interest in the Blackstone Group.