China Life to develop alternative investments programme

The Beijing-based insurance giant next month will introduce plans to expand into private equity, real estate and infrastructure investments.

China Life Insurance, the New York- and Hong Kong-listed insurance and annuity products provider, is to diversify its investments into alternative assets including real estate, private equity and infrastructure.

Traditionally, the Beijing-based group has invested in fixed-income securities, such as bank deposits and treasury, corporate and subordinated bonds. However in October, China Life will reveal details on how it will increase its investment activities into other sectors.

Despite the plans, Yang Zheng, general manager in charge of finance, said in a statement that China Life would not deviate from its traditional investments during the second half of this year.

Under Chinese regulations, insurance companies are unable to invest in riskier alternative assets, however the China Insurance Regulatory Commission is expected to open the gates to invest substantially in such sectors.

Orient Securities analyst Wang Xiaogang told China Daily newspaper he thought the Chinese government would cap insurance companies’ exposure to alternative asset classes to 5 percent of total investments as the sector makes its first inroads into riskier investments.

China Life currently has a market capitalisation of $111 billion (HK$ 860 billion), according to Bloomberg.