New China Life plans IPO

A source close to the deal confirmed to AVCJ that New China Life filed its listing application with the CIRC, and the company will likely offer 15-20% of its stake on a post-IPO basis. UBS has been hired to manage the process, though financial groups Goldman Sachs, Morgan Stanley, Nomura and CICC are also likely to be involved in the process, the source added.

The latter two firms are among New China Life's crew of financial holders. Currently the life insurer, touted as China's third-largest by gross premiums, is approximately 40%-backed by Central Huijin Investment Ltd., a division of sovereign wealth fund CIC. Baosteel Group Corp., the second-largest steel producer in the world, holds 20% of the company. That stake size is also what Zurich Insurance Co. held until it sold a 5% stake to parties affiliated with Nomura and CICC in March.

Temasek Holdings and Standard Chartered Private Equity hold 4.5% - 3% held by Temasek and 1.5% by SCPE - which was acquired at the end of last year. An affiliate of Hony Capital also holds 9%.

The source could not confirm whether these outfits would minimize their shares following the debut.

The news comes weeks after Goldman Sachs acquired a 12.02% minority stake Taikang Life Insurance, buying its share from French insurance giant AXA for an estimated $925 million. Industry analysts also predict that Taikang Life may launch its IPO as early as this year, which may garner a parallel $4 billion.

The growth of the insurance sector in China has rocketed in recent years, with the potential still remaining tremendous. According to AVCJ's source, life insurance in China has steadily grown at 26% CAGR, compared to 2.4% in the UK and ostensibly no growth in the US.

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• Topics
• Greater China
• Financials
• CIC
• Temasek Holdings
• Standard Chartered Private Equity
• Hony Capital