Sun Life Everbright, other Chinese insurers to launch PE fund

The small and medium-sized enterprises (SMEs) focused fund, with an initial registered capital of RMB100 million ($16 million), is the first domestic PE vehicle established and managed by Chinese insurance companies.

The other insurers involved are Anhua Agricultural Insurance, Chang An Property & Liability Insurance, Soochow Life Insurance, Kunlun Health Insurance and Taishan Property & Casualty Insurance Company, according to a statement.

The launch of new fund comes after the China Insurance Regulatory Commission (CIRC) last week said it would allow insurers to set up their own PE funds. The funds should mainly focus on investing in local SMEs. The change may result in RMB2 billion being invested in SMEs, with an expected first phrase of fundraising worth around RMB500 million.

Last month, Chinese insurers received regulatory clearance to invest in venture capital funds, a move that is allowing greater exposure to alternative assets.

In 2010, the CIRC allowed insurers to start making LP commitments to domestic private equity funds. Last year, the cap on their total exposure to private equity funds and private companies was raised to 10% of total assets, up from 5%. Fast-track approvals have also been introduced for PE fund commitments, with the average waiting time reduced from one year to a few months.

In late 2012, insurers got the green light to invest in offshore PE funds.

Sun Life Everbright Asset Management, a joint venture backed by China Everbright Group, was set up in 2012. It manages the insurance company's renminbi- and US dollar-denominated assets.

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• Topics
• Greater China
• Fundraising
• Regulation
• LPs
• China
• Fundraising
• China Everbright
• regulation
• SME
• LPs