By Bloomberg News
(Bloomberg) -- China’s largest life insurer is seeking more direct investments overseas after purchases of stakes in firms such as Uber Technologies Inc. spurred its appetite and as capital controls restrain rival mainland buyers.
China Life Insurance Group is focusing on infrastructure, especially in the U.S. and Europe, and technologies and products with the growth potential in China to justify high valuations, according to Wan Yiqing, deputy chief executive of the 3.4 trillion yuan ($515 billion) insurer’s alternative investment arm.
Offshore income lets the company seize opportunities even amid government curbs on money outflows, said Wan, who runs private equity investments at China Life Investment Holding Co.
Deals signed this year will probably exceed 15 billion yuan, and investments next year are “expected to be more,’’ he said in an interview in Beijing.
“We’re becoming increasingly active as both deal sources and our own abilities grow,’’ Wan said. “Opportunities remain abundant, but valuations are not cheap.”
Companies with overseas funding are benefiting from government scrutiny of outbound money flows and a clampdown on aggressive buyers such as Anbang Insurance Group Co. and Dalian Wanda Group. As the government seeks to guide and limit acquisitions, overseas deals announced by Chinese firms have fallen 30 percent this year from the same period last year, data compiled by Bloomberg show.
The state-owned insurer strictly abides by regulators’ rules, and its overseas investment strategy, while based on its own rationale, is consistent with Chinese government directives, Wan said.
China Life Investment focuses on investments such as real estate and infrastructure. The firm’s private-equity portfolio, started in 2013, has swelled to 60 billion yuan, including major stakes in Uber, Ant Financial, Wuxi AppTec and BGI Genomics Co., according to Wan. There’s also a stake in TPG, the Fort Worth, Texas-based private equity firm co-founded by David Bonderman.
The company pocketed a “multiple-times’’ return from online mall JD.com Inc. and expects more highly profitable exits, Wan said. China Life Group owns an almost 2.5 percent stake in BGI, the genome mapping company whose shares jumped more than tenfold since an initial public offering in July.
Wan’s team of more than 50 people are looking at infrastructure, healthcare and technology projects in the U.S. and Europe. They’re also assessing some technology and medical companies in Israel whose products are suited to China, he said.
In China, the insurer has focused on healthcare, financials, technology, transportation, and logistics services supporting the telecommunications, media and technology (TMT) sector, Wan said. Firms with “technology-enabled” competitive advantages are a target. In the hunt for breakthroughs, China Life Investment just established a Disruptive Technologies Application Lab.
Beijing-based China Life Insurance Group is the parent of the Hong Kong-listed China Life Insurance Co. The listed firm’s “other equity investments,” including private equity, accounted for just over 3 percent of investment portfolio as of June 30, or 82.3 billion yuan.
Meanwhile, premium income at the group’s overseas unit exceeded HK$70 billion ($9 billion) last year, according to a company website, highlighting the availability of offshore funds.
--With assistance from Timothy Sifert.
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