China’s RMB563 billion ($82 billion; €56 billion) National Social Security Fund (NSSF) will up its private equity investments next year as its assets under management grow.
Dai Xianglong, chairman of the pension fund, said at a conference in Shanghai today that NSSF’s assets under management will swell to RMB1 trillion in 2010, according to a Reuters report. Since NSSF is presently allowed to invest up to 10 percent of its assets in private equity, this means it will be able to invest up to RMB100 billion in the asset class by next year.
NSSF’s assets have jumped since China’s State Council decided in June that former state-controlled companies listed on domestic stock exchanges are obliged to transfer 10 percent of the total raised in their initial public offerings (IPO) to the pension fund, already China’s largest.
Dai said this will result in a total cash injection of RMB800 million, of which RMB300 million has already been received, according to the Wall Street Journal.
Earlier this year, it was reported by Reuters that the NSSF was seeking approval from China’s authorities to invest in foreign private equity funds for the first time. Speaking at a conference in April, Dai said the fund also planned to commit capital to at least three to private equity firms in 2009.
So far, it has committed RMB2 billion each to RMB-denominated funds managed by CDH Investments and Hony Capital. It also reportedly agreed to commit capital to RMB-denominated funds being raised by Shenzhen Capital Group, a venture capital firm affiliated to the Shenzhen government, and Science and Merchants Investment Management, which is affiliated to the government of Shanxi province.
NSSF could not be reached for comment at press time.