NSSF: Still room to increase PE investments

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

"Under the rules, up to 10% of the social security fund can be used for venture capital and private equity investment, and the ratio at the end of 2011 was only 2.2%," Wang told local media, adding that the primary market is still full of investment opportunities despite volatility in public equities.

The NSSF has shown interest in both local and overseas private equity investments. While domestic firms know local operations better, Wang explained that the standardized regulations of foreign players is appealing. He also highlighted the role that PE firms can play in helping Chinese companies in overseas M&A.

Earlier this year, Sany Heavy Industry, the Chinese construction-equipment maker, and CITIC Private Equity purchased Germany's Putzmeister in one of the largest China outbound deals involving a local private equity firm. CITIC Private Equity would retain a minority stake of the company, subject to regulatory approval.

"There are lots of opportunities in the high-end manufacturing sector waiting for investors to discover them," Wang commented.

As of the end of 2010, NSSF had assets of more than RMB850 billion and has achieved an average annual yield of 9.8% since its establishment.

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• Topics
• Greater China
• Investments
• LPs
• China
• NSSF
• Outbound investment
• Citic Private Equity
• CDH Investments Management