China Investment Corp (CIC), the country's $200 billion sovereign wealth fund, has signed a deal with JC Flowers & Co to launch a $4 billion private equity fund to focus on investments in US financial assets, despite increasing worries over the snowballing credit crisis, a source said.

Beijing-based CIC will become a limited partner of the new private equity fund, in which CIC will provide about 80 percent of the contributions, the source said.

New York-based private equity firm JC Flowers, run by former Goldman Sachs banker Christopher Flowers, will offer about 10 percent of the money, said the source, who declined to be identified as he was not authorized to speak to the media.