China Life Insurance has obtained license to set up a private equity fund, according to a report published in caijing.com.cn.
The license will allow the Chinese insurer to invest in non-guaranteed bonds, fixed assets and the stocks of non-listed companies.
However, the total value of the investments are to be capped at up to 5% of China Life’s total assets at the end of each quarter, said the report.
According to the report, as China Life had recorded total assets of RMB1.51 trillion at the end of the first quarter of 2011, it could invest up to RMB75.7 billion in private equity.
According to regulations, funds cannot be invested in enterprises which are highly pollutive, or with low-technology value-added.
In addition, firms are also barred from investing in venture capital funds or to establish investment companies.
Equity investments are limited to investments in insurance companies, financial enterprises or enterprises in the pension, medical or automobile sectors.