BOAO, China -- China's sovereign wealth fund is looking for investment opportunities in Europe though its head was cautious about the continent's economy.

"From the investment perspective, (we're) not very optimistic about Europe," said Lou Jiwei, chairman of China Investment Corp at the Boao Forum for Asia last week, according to the Dow Jones Newswire.

"But it doesn't mean we wouldn't like to invest (in Europe)," he said, adding CIC has big exposure to Europe and its investment return from the continent is not bad.

Lou's fund was set up in 2007 to invest a slice of China's massive foreign exchange reserves which reached $3.04 trillion at the end of March to earn a better return.

The makeup of China's reserves, the world's largest, is secret but Beijing is believed to keep a big part in US Treasury securities and other US government debt.

The Chinese government has been trying to diversify its holdings in recent years, with a significant amount invested in Europe.

Even after the outbreak of the sovereign debt crisis in Europe in 2009, China continued buying the national bonds of various European countries.