China’s Dajia Insurance Group has launched its first private equity (PE) fund at 5 billion yuan ($728.1 million) to invest in the equities of healthcare and elderly care providers looking to serve an ageing population in the world’s second-biggest economy.
The move makes Beijing-based Dajia the latest Chinese insurance firm to deploy capital into PE after regulators in the country relaxed rules to encourage more insurance money to flow into this asset class. In recent years, China Life Insurance, China Pacific Insurance, and Taikang Life Insurance have either built their own PE funds under partnerships or committed to funds managed by existing PE companies.
As of end-2022, 75 insurer-backed PE funds in China had 549.2 billion yuan ($79.9 billion) in assets under management (AUM), according to official data from the Insurance Asset Management Association of China (IAMAC), a self-regulatory organisation of China’s insurance asset management industry.
In 2022 alone, the country saw the addition of 21 insurer-backed PE funds collectively managing over 121.8 billion yuan ($17.7 billion). That translates into a 23.5% increase in the number of funds and a 13.8% rise in the total capital commitments from the previous year, according to IAMAC data.
Dajia, which was established in June 2019 to manage the assets of the collapsed financial conglomerate Anbang Insurance Group, plans to invest in the development of elderly-care services, solutions, and facilities that “could bring synergies” to its main insurance business.
Its decision to set up a PE fund for the elderly care market comes alongside what it calls “a fundamental reality” in China’s demographics. The country’s population fell in 2022 to 1.4 billion, down some 850,000 people from the previous year. This was the first contraction in over 60 years, according to China’s National Bureau of Statistics (NBS).
As Beijing highlights the importance of the elderly-care industry in its five-year plan for 2021-25, the Chinese state-owned insurer plans to double down on its provision of products and services covering elderly medical care, life insurance, geriatric rehabilitation, nursing care for senior citizens, and more.
Dajia added that elderly care has been “a strategic focus” for the group since 2019.
