In one of the most high-profile signs so far that foreign capital is swooping in on distressed US property, China's $300bn (€226bn) sovereign wealth fund is in advanced talks with Harvard University's endowment to buy the university's stakes in half a dozen US-focussed real estate funds for about $500m, according to people familiar with the matter.

The potential deal reflects a broader push by China Investment Corp., or CIC, to deploy its capital after staying largely on the sidelines amid the global financial crisis. With more capital available than any other investor in the world, CIC has increased the proportion of assets allocated to higher-risk assets.