Against the difficult background of fundraising in the primary market, insurance funds are accelerating their deployment. On September 25, Great Wall Insurance, together with state-owned enterprise mixed reform funds, took action to invest in an equity fund under Yinshan Capital; on September 24, investing 4 billion yuan to establish a private equity investment fund in Zhuhai; On August 30, Shenzhen Zhengshi Private Equity Investment Fund Partnership Enterprise (Limited Partnership) was established, and the equity penetration shows china life insurance as one of the behind-the-scenes investors. $CHINA LIFE (02628.HK)$ Investing 4 billion yuan to establish a private equity investment fund in Zhuhai; On August 30, Shenzhen Zhengshi Private Equity Investment Fund Partnership Enterprise (Limited Partnership) was established, and the equity penetration shows china life insurance as one of the behind-the-scenes investors. $PING AN (02318.HK)$ china life insurance is one of the backers.

According to incomplete statistics from Caixin reporters, as of now, insurance funds have been active in becoming limited partners (LP), with subscribed capital exceeding 50 billion yuan for the year. It is worth noting that some insurance professionals have told Caixin reporters that the companies are still relatively cautious about investing in equity assets. Apart from concerns about short-term profit volatility, they are more worried that investment returns that do not look good in the short-term assessment period will affect their KPI.

However, the key system of insurance funds for "long-term and long-term investment" is beginning to be solved. Just on September 26, the Central Financial Committee and the China Securities Regulatory Commission jointly issued the "Guiding Opinions on Promoting the Entry of Medium- and Long-Term Funds into the Market", focusing on continuously optimizing the capital market ecology, vigorously developing equity mutual funds, and improving various policies and systems to facilitate the entry of medium- and long-term funds into the market. Wang Peng, deputy researcher of the Beijing Academy of Social Sciences, stated that the "Guiding Opinions" solve the problems facing the assessment mechanism and equity investment of insurance funds, improve long-term assessment mechanisms, enrich the long-term investment models of insurance funds, improve equity investment regulatory systems, and promote insurance institutions to become steadfast value investors.

"Patient Capital" is accelerating its layout, with China Life, Taiping Insurance, and other insurance funds successively investing in private equity funds.

Insurance funds are important institutional investors in the capital market. Recently, the State Council issued the 'New National Ten Regulations' on the insurance industry, proposing to leverage the long-term investment advantages of insurance funds.

Recently, Li Yunze, Director of the National Financial Supervisory Authority, stated at a press conference that the next step will be to expand the reform pilot of long-term investment of insurance funds, support other eligible insurance institutions to establish private equity investment funds, further increase investment in the capital market; urge and guide insurance companies to optimize assessment mechanisms, encourage and guide insurance funds to engage in long-term equity investments.

Immediately after the announcement, insurance funds responded to the capital market with actual actions. On September 25, Nanjing Yinshan Equity Investment Partnership Enterprise (Limited Partnership) underwent industrial and commercial changes, adding Taiping Insurance and Chengdu High-tech Source Innovation Equity Investment Fund Partnership Enterprise (Limited Partnership) as partners.

At the same time, the contribution amount of the Nanjing Yinshan Equity Fund increased from 2.209 billion yuan to 2.309 billion yuan.

As early as September 14, PICC, China United Life Insurance, and two insurance funds, along with the China State-owned Enterprise Mixed Ownership Reform Fund, became partners in the fund.

Public information shows that Nanjing Yinshan Equity Investment Partnership Enterprise was established in September 2021, with Yinshan Capital as the executive general partner, focusing its investments mainly on modern logistics services, digital supply chain, new energy, and logistics supply chain technology.

Of note, just the day before on September 24, China Life invested 4 billion yuan to establish Zhuhai Leadership Kunpeng Equity Investment Fund Partnership Enterprise (Limited Partnership) in Zhuhai City.

It is reported that the fund's executive transaction partner is China Life Real Estate Investment Management Co., Ltd., and the fund's operational scope mainly includes activities such as private equity investment, investment management, and asset management in the form of private equity funds.

According to partner information, Zhuhai Linghang Kunpeng Equity Investment Fund general partnership enterprise is jointly funded by China Life and its subsidiary Tianjin Lingyan Enterprise Management General Partnership enterprise (Limited Partnership) and China Life Real Estate Investment Management Co., Ltd.

Regarding the successive actions of insurance capital such as China Life, Taiping Insurance, and China Pacific Insurance, industry insiders believe that private equity funds are an important component of insurance companies' asset allocation, mainly considering future financial returns. In addition, as representatives of patient capital, insurance capital entering the venture capital market shows its characteristics of long-term investment, which helps support strategic emerging industries and future industry development, and promotes the cultivation of new productive forces.

Insurance capital's LP subscribed capital has exceeded 50 billion yuan, and regulatory efforts to remove institutional barriers to promote 'long-term investment of long money.'

In fact, $CHINA LIFE (02628.HK)$ Investing 4 billion yuan, establishing an equity investment fund in Zhuhai, and participating in undisclosed Capital Venture Capital funds such as Taiping Insurance are just a glimpse of the active participation of insurance funds in the private equity market this year. According to incomplete statistics by Financial Link reporters, since the beginning of the year, insurance funds have participated as LPs, and the subscribed capital has exceeded 50 billion yuan.

On August 30th, Shenzhen Zhengping Private Equity Investment Fund general partnership enterprise (Limited Partnership) was established. Equity penetration shows that Ping An Life is one of the hidden investors behind the scenes.

On August 23, China Life Insurance, the National Social Security Fund Council, and others jointly invested to establish the Yunnan New Energy Equity Investment Fund, in the form of an equity investment fund to help Yunnan Energy Investment introduce equity funds and support the revitalization of high-quality hydroelectric assets.

On August 8, Suzhou CPIC Modern Industry Equity Investment Fund Partnership Enterprise (Limited Partnership) completed the recordation with the Fund Association. It is reported that this fund was jointly established by PICC Capital in conjunction with PICC P&C, PICC Life, and PICC Health, and it is the insurance industry's first private equity investment fund with the core goal of building a modern industrial system.

Another billion-dollar insurance-related fund is also attracting attention. In May this year, China Life Insurance Group announced the establishment of the Yinfadi Economic Industry Investment Fund, with a total size of 10 billion yuan, and an initial size of 5 billion yuan. This is the insurance industry's first equity fund with a silver-haired theme.

Furthermore, there have been at least 2 insurance-related private equity funds since the beginning of this year, with one each registered by China Life Group's China Life Jinshi and Sunshine Ronghui Capital. Among them, the Xiamen Jimei District Industrial Development Fund managed by Sunshine Ronghui Capital completed the recordation with the Fund Association in early June, with a size of 2 billion yuan.

In the view of Qiu Jian, Chief Insurance Researcher at the China Insurance Research Institute, insurance funds actively entering the private equity market, investing in multiple private funds, and with significant amounts, undoubtedly refreshes the capital market for the primary market facing fundraising challenges.

It is worth noting that insurance companies are still limited by two major pain points when promoting funds into the market. Bai Xue, Chief Investment Officer of China Post Insurance, analyzed: firstly, under the new accounting standards, the impact of investing in equity assets on net income is too significant; secondly, under the second phase of the replacement of generations in repayment, many insurers are under pressure from the solvency adequacy ratio, as investing in stocks will still tie up a high amount of capital, making it difficult to take risks.

However, a significant policy dividend is that the key system for insurance funds to 'invest for the long term' is beginning to break through. Just on September 26, the meeting of the Political Bureau of the CPC Central Committee deployed to vigorously guide the entry of medium and long-term funds into the market, clear the blockages for social security, insurance, wealth management, and other funds to enter the market, and strive to boost the capital markets. On the same day, the Central Financial Office and the China Securities Regulatory Commission jointly issued the 'Guiding Opinions on Promoting the Entry of Medium and Long-Term Funds into the Market,' emphasizing three measures in optimizing the ecological environment of the capital market, vigorously developing equity public funds, and focusing on improving various supporting policies and systems for the entry of medium and long-term funds into the market.

Industry insiders state that the 'Guiding Opinions' increase the regulatory inclusiveness of equity investments of medium and long-term funds, by fully implementing a long-term assessment of over 3 years, clearing institutional barriers that affect long-term investment of insurance funds, promoting insurance institutions to be determined value investors, and providing a stable long-term investment for the capital market.

According to Wang Peng, associate researcher at the Peking Academy of Social Sciences, the 'Guiding Opinions' solve the difficulties faced by assessment mechanisms and equity investments of insurance funds, improve the long-term assessment mechanism, enrich the long-term investment model of insurance funds, improve the equity investment supervision system, and promote insurance institutions to become resolute value investors.

Editor/Rocky