Insurance funds are accelerating their deployment in private equity investments

Our reporter Yang Xiaohan

Since the beginning of this year, insurance funds and private equity investments have been active. According to Tianyancha APP information, recently, Tianjin Lanqin Equity Investment Partnership (Limited Partnership) was established, with seven insurance companies among its partners.

In January this year, China Life Insurance issued two announcements in succession, announcing plans to invest in the establishment of an elderly care industry equity investment fund and a Yangtze River Delta private equity fund, with a total committed capital of nearly 12.5 billion yuan.

Experts interviewed said that private equity investments can improve the investment returns of insurance companies, reduce short-term profit fluctuations, and have durations that meet the needs of insurance funds, which is beneficial for leveraging the advantages of long-term capital, thus making them attractive to insurance funds.

Zhou Jin, partner at Tianzhi International Financial Industry Consulting, told Securities Daily that increasing private equity investments and jointly establishing private funds with partners to promote long-term market entry of insurance funds have three main implications: First, insurance funds respond to the call for “patient capital” by investing through equity investment funds, which, after meeting certain conditions, can be accounted for using the equity method, reducing valuation fluctuations from direct investments on financial statements. Second, private fund managers can adopt more flexible mechanisms in control authorization and performance assessment, better practicing the long-term value investment philosophy of insurance funds, and playing a positive role in the stable development of capital markets. Third, for some investment targets in undervalued areas or with potential for appreciation, insurance funds can leverage their long-term capital advantage, increasing allocation from the perspective of long-term asset-liability matching and cyclical investment returns, holding long-term to achieve higher long-term investment returns, and better utilizing the multi-level resource allocation function of capital markets.

In recent years, the proportion and scale of equity investments by insurance funds have continued to increase, and equity investments through private equity funds have become more active.

The National Financial Regulatory Administration recently released data on the utilization of insurance funds in Q4 2025, showing that by the end of last year, the total balance of stocks and securities investment funds held by life and property insurance companies was about 5.7 trillion yuan, an increase of approximately 1.6 trillion yuan from the end of 2024, a growth of 38.9%. Among them, stock allocations amounted to about 3.73 trillion yuan, accounting for 9.7%.

At the same time, insurance funds continue to invest in private equity funds. According to ZERONE statistics, in 2025, the scale of insurance institutions as limited partners (LPs) investing in registered private equity funds exceeded 100 billion yuan.

Zhang Lingjia, President of Guangdong Kaily Capital Management Co., Ltd., told Securities Daily that increasing private equity fund investments involves both risks and rewards. On the reward side, this investment form can help insurance funds improve returns when interest rates decline, optimize asset structure, and match the duration with that of life insurance. Additionally, it can reduce the impact on current profits through accounting treatment. On the risk side, the underlying assets of equity funds, especially after being penetrated, are more complex and non-standardized compared to fixed income products, increasing the difficulty for investment institutions in due diligence, judgment, valuation, and post-investment management. Moreover, private equity projects, especially private equity investments, tend to have poor liquidity, posing new challenges for liquidity management of insurance funds.

Looking ahead at the future equity investment strategies of insurance funds, Zhou Jin said that based on current market conditions, most insurance companies are expected to continue their current asset allocation strategies, adopting a “fixed income +” investment approach. This involves increasing allocations to equity assets, strengthening secondary market holdings, seeking to enhance “quasi-fixed income” buffers, and increasing positions in stocks with appreciation potential.