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Insurers allowed to dabble in private equity and real estate
By Zhang Fengming |
September 6, 2010, Monday
|
Online Edition
Online Edition
CHINA allowed insurers to tiptoe the private equity and real estate sectors to broaden their investment options.
Chinese insurers can invest up to 5 percent of their assets in private equity and 10 percent in real estate, the China Insurance Regulatory Commission said on its website.
It's the first time for the top insurance regulator to give a clear stance on investment in the growing private equities in China.
Insurers are banned from investing in venture capital or equities of high-pollution, high-consumption companies, the top regulator said late yesterday, quoting new rules regarding investment in the two sectors.
Private equities are growing rapidly in China in recent years, driving regulators to include the sector against the backdrop. Previously, some insurers are eying investment projects in the sector, but the lack of clear regulation deterred them.
In the first half of this year, more than US$19 billion are raised through private equity funds, up 616.9 percent than a year ago. It surpassed the total capital raised in 2008. Thirty-two funds raised capital in the first half, up 191 percent from a year ago, bouncing back to a high in 2007.
China has long acclaimed to broaden the investment options of its insurers, which are limited mainly to areas of low-return bonds, bank deposits and currency products.
The new rules allowed insurance companies to deeper their roots in the higher-risk but higher returns market.
Chinese insurers can invest up to 5 percent of their assets in private equity and 10 percent in real estate, the China Insurance Regulatory Commission said on its website.
It's the first time for the top insurance regulator to give a clear stance on investment in the growing private equities in China.
Insurers are banned from investing in venture capital or equities of high-pollution, high-consumption companies, the top regulator said late yesterday, quoting new rules regarding investment in the two sectors.
Private equities are growing rapidly in China in recent years, driving regulators to include the sector against the backdrop. Previously, some insurers are eying investment projects in the sector, but the lack of clear regulation deterred them.
In the first half of this year, more than US$19 billion are raised through private equity funds, up 616.9 percent than a year ago. It surpassed the total capital raised in 2008. Thirty-two funds raised capital in the first half, up 191 percent from a year ago, bouncing back to a high in 2007.
China has long acclaimed to broaden the investment options of its insurers, which are limited mainly to areas of low-return bonds, bank deposits and currency products.
The new rules allowed insurance companies to deeper their roots in the higher-risk but higher returns market.
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