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China Life to support Suzhou infrastructure fund

  • Alvina Yuen
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China Life has partnered with the government of Suzhou to roll out a RMB10 billion ($1.6 billion) infrastructure fund. It said to be the first private equity infrastructure fund launched by a domestic insurer.

China Life and Suzhou International Development Venture Capital Holding will contribute RMB3 billion and RMB6 billion, respectively. The remaining RMB1 billion will be raised from social funds.

"The pair will leverage their own competitive advantages to primarily invest in growing companies with steady cash flow across Suzhou's strategic industries through market-oriented operations and professional asset management," according to a statement.

Last August, China Life was granted a license by domestic regulators to invest in private equity. This May, the insurer injected RMB2 billion ($315 million) into CITIC Private Equity's renminbi-denominated fund. It came after its RMB1.5 billion investment in Hony Capital's most recent vehicle.

In July, The China Insurance Regulatory Commission (CIRC) allowed insurers to invest up to 10% of their total assets in private equity. Investment in the asset class was previously capped at 5%. The move - which is part of a wider effort by the regulator to diversify investment channels for local insurers - is expected to see $50 billion of fresh capital injected into unlisted companies.

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