NSSF reaches out to private equity firms
The National Council for Social Security Fund (NSSF), China’s state pension fund and best-known LP, is reaching out to private equity firms as it seeks to ramp up investments. It recently signed an agreement with one PE firm, is conducting due diligence on two more and is in preliminary discussions with yet another two.
Wang Zhongmin, vice chairman of the NSSF, said these agreements were part of a wider strategy that will see the fund inject RMB17 billion ($2.63 billion) into around 100 firms - presumably a combination of direct investments and investments made through private equity funds. He said that RMB10 billion ($1.5 billion) had already been invested, China Daily reported.
Wang added that the NSSF has so far cooperated with nine private equity firms and invested in 11 funds. These include CDH Investment, IDG Capital Partners and Hony Capital.
Wang expects plenty of companies to turn to private equity as tightening monetary policy threatens liquidity positions. He sees PIPE investments in banks - through equity offerings or subordinated debt issues - as particularly attractive because banks' price-to-earnings ratios are currently relatively low.
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