On December 17, 2021, the cbcirc issued the notice on amending some normative documents in the field of insurance fund application (hereinafter referred to as the notice).
We believe that the purpose of this notice is to improve the investment autonomy of insurance funds, alleviate the pressure on the investment rate of return of insurance companies, further standardize the use of insurance funds, and provide important guidance for the investment direction of insurance enterprises.
First, the supply of non-standard assets and long-term bonds are in short supply, and insurance companies are facing great pressure on investment yield in their operation; Second, under the background of vigorously supporting the direct financing of specialized special new enterprises, guiding insurance enterprises to invest in private equity funds has become an important way to improve the efficiency of capital utilization; Third, real estate investment continues to explode. It is necessary to prevent the systematic risks brought by the high proportion of real estate investment to the operation of insurance enterprises.
The notice further regulates and guides the use of insurance funds from three aspects: liberalizing the allocation of equity investment funds, encouraging the allocation of equity assets, adding non-standard and limiting the proportion of real estate investment. 1) Encourage insurance funds to allocate equity assets and further relax restrictions. The notice cancels the restrictions on the number of service brokers and custodians for insurance institutions to participate in securities trading, reduces the frequency of information disclosure of investment management capacity, and further encourages insurance institutions to independently invest in standardized products; 2) Relax the investment restrictions of insurance funds on equity investment funds. The circular allows insurance funds to invest in equity investment funds actually controlled by non insurance financial institutions, and cancels the limit on the raising scale of a single venture capital fund invested by insurance funds. At the same time, for the promoters of insurance private equity funds and their affiliated insurance institutions, they can independently select the investment proportion according to the investment strategy, simplify the decision-making process of insurance companies investing in insurance private equity funds, and improve the market-oriented operation level of products; 3) Add restrictions on the proportion of non-standard and real estate investment to further prevent risks. In the current regulatory policy on the proportion of insurance assets, the proportion limit of investment in non standardized financial products and real estate assets shall be added to prevent investment risks in the field of non standardized assets.
We believe that the introduction of the notice will ease the pressure on the investment side of insurance enterprises and significantly benefit the venture capital industry. On the one hand, the issuance of the notice further standardizes the use of insurance funds, alleviates the pressure on the investment rate of return of insurance enterprises, and endows insurance enterprises with stronger investment autonomy. In the future, the investment structure of insurance enterprises will be further optimized and the investment rate of return will gradually rise. Under the background of gradual resolution of real estate risks, we recommend China Fortune Land Development Co.Ltd(600340) debt resolution plan Ping An Insurance (Group) Company Of China Ltd(601318) . On the other hand, guiding insurance funds to invest in private equity funds reflects the strong support of the policy for the venture capital industry. The prosperity of the venture capital industry continues to improve under the increasing weight of the policy. We recommend Sichuan Shuangma Cement Co.Ltd(000935) ( Sichuan Shuangma Cement Co.Ltd(000935) is jointly recommended with the building materials group) as the head private equity fund manager who takes the lead in laying out the high-quality track of hard technology.
Risk warning: the return on investment of insurance companies is lower than expected; The debt resolution plan is not as expected; The environment of venture capital industry is deteriorating; The pace of IPO slowed down.
