NSSF to boost investment in PE funds

Speaking to a private equity forum held last Sunday, Dai Xianglong, NSSF's chairman, said the pension fund will increase its investment in domestic PE funds to RMB30 billion ($4.1 billion) by the end of 2012, compared to RMB19.5 billion in 2011. He expects the total to reach RMB50 billion by 2015, according to Shanghai Securities Journal.

"The size of China's pension system is expanding, together with pension funds and life insurance managed by local governments, all of these contribute to a rising demand for private equity investments," said Dai, adding that all institutional investors in China are likely to focus more on private equity.

Wang Zhongmin, the fund's vice chairman, said in March that the NSSF has only put 2.2% of its capital into private equity and venture capital, leaving considerable room to increase its exposure to the asset class.

The NSSF had committed close to RMB20 billion ($3.2 billion) to 10 venture capital and private equity firms across 13 funds as of April this year. About RMB12 billion of this has already been invested. Last year, the pension fund invested in five new funds managed by five GPs, including CDH Investments.

The pension fund will also increase investments in state-owned assets. Under Chinese regulations, the NSSF is allowed to commit up to 20% of its capital to direct investment in SOEs. Dai told local media in April that the pension fund would continue to support SOEs' business restructuring, M&A, as well as their development in emerging industries and their "going global" strategies.

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• Topics
• Greater China
• LPs
• China
• NSSF
• CDH Investments Management
• LPs