China Pacific Insurance Co Ltd (CPIC), one of the biggest insurance groups in China, is pooling 50 billion yuan (almost $7 billion) for two private investment funds respectively focusing on M&A in emerging sectors of strategic importance and securities investments.
The Shanghai-based insurer announced on Tuesday evening the launch of the two private investment funds as it looks to provide “patient capital” to “contribute to the sustainable, healthy development of China’s capital markets.”
The two new funds include an M&A fund, which is tentatively named “China Pacific Insurance Strategic Sector M&A Fund,” to target a fund size of 30 billion yuan ($4.2 billion) and 10 billion yuan ($1.4 billion) in its first closing. The other fund focusing on securities investments is tentatively named “China Pacific Insurance No.1 Private Securities Investment Fund,” targeting 20 billion yuan ($2.8 billion), according to an official announcement by CPIC.
The M&A fund has a mandate to focus on the restructuring and “innovation-driven transformation” of state-owned enterprises and state-affiliated companies in Shanghai. It will invest in key areas that are promoting the construction of a modern industrial ecosystem and other emerging industries of strategic importance to China’s national growth, CPIC said in the announcement.
The introduction of CPIC’s private securities investment fund, which will invest in stocks, bonds, and mutual funds in the Chinese stock markets, comes amid Beijing’s plan to guide big state insurers and commercial insurance funds to increase investments in the A-share market in mainland China.
Under the plan released in January, the Chinese regulators implemented a long-term performance evaluation for state-owned insurance companies, with the annual return on equity weighted no more than 30% of the evaluation, and at least 60% for a longer three-to-five-year cycle.
Established in 1991, CPIC operates as a comprehensive insurance group dual-listed on the Shanghai and Hong Kong stock exchanges, offering property and casualty insurance, life insurance, health insurance, agricultural insurance, pension insurance, and asset management.
The Chinese insurance group’s operating income in 2024 was close to 404.1 billion yuan ($56.1 billion), an increase of 24.7% from 2023. Its net profit last year was approximately 45 billion yuan ($6.2 billion), up 64.9% year over year. Its total number of customers stood at 183 million, according to its latest financial results released in March.
