Australia's QIC announces partnership with Ping An

"As investors grapple with the challenge of achieving adequate returns we believe QIC's specialization in alternative assets will be of increasing interest to institutions such as PAAMC. In turn, the relationship between our two organizations can potentially open up new investment opportunities for Australian investors in China," Don Luke, chairman of QIC, said in a statement.

Chinese insurance companies received clearance to invest in offshore private equity and real estate funds in 2012, but take-up has been modest. As of last year, about 2% of the industry's RMB12.36 trillion ($1.8 trillion) in total assets had been invested internationally. This is despite the overseas asset allocation allowance, which includes fixed income and private equity, rising from 5% to 15% in 2013.

Nevertheless, Ping An is seen as one of the more aggressive players across fund investments and direct deals. For example, the company mobilized three of its sister divisions to commit a total of $950 million to a $3.5-4 billion fund-of-funds raised by Neuberger Berman, according to one industry participant.

Citing data supplied by Z-Ben Advisors, QIC noted that the Chinese institutional market - comprising sovereign wealth funds, pension funds and insurers - was worth $7.1 trillion in 2015, up from $1.1 trillion a decade earlier, although overseas investments represent less than 2% of most allocations. With overall assets projected to reach $10.8 trillion by 2021, a 20% overseas allocation would be worth $2.1 trillion.

PAAMC was established in 2005 and had more than RMB2.08 trillion in assets across multiple public and private classes as of June 2015. QIC has A$76.9 billion ($58 billion) under management, covering infrastructure, real estate, private equity, liquid strategies and multi-asset investment services.

The Australian group has also established relationships in China to support growth for domestic private equity investments. The acquisition of a majority stake in cattle station operator North Australian Pastoral Company (NAP) for A$400 million earlier this year was in part driven by plans to ship fresh beef to demand centers in Asia along supply chains that QIC plans to help build.

"QIC as a world-renowned, alternative investment institution has proven ability to source and manage complex investments. PAAMC and QIC will leverage each other's investment specializations to provide better investment solutions for both Chinese and Australian investors," said Fang Wan, chairman of PAAMC.

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• Topics
• Australasia
• Greater China
• LPs
• China
• Australia
• QIC
• Ping An