China Life sets up $1.4b equity investment fund to boost silver economy

China Life sets up $1.4b equity investment fund to boost silver economy

Photo by Joey Huang on Unsplash

China Life Insurance has set up an RMB-denominated equity investment fund that will deploy 10 billion yuan ($1.4 billion) in the country’s silver economy. The country’s elderly population is projected to reach 28% of the total by 2040.

The company, one of China’s biggest insurers with a market capitalisation of over $100.9 billion, announced the fund launch on Wednesday on its WeChat account and said it targets a first close at 5 billion yuan ($692 million).

China Life said that multiple insurance firms have shown interest in committing capital to the new fund, whose Chinese name can be directly translated into “Silver Economy Industry Investment Fund.”

China Life Private Equity Investment, a wholly-owned private equity (PE) subsidiary of China Life’s investment arm, is managing the fund as its general partner (GP).

The new fund, strategically located in Chongqing City to help improve elderly care in western China, will strategise its investments to “align with the policy guidance of the Chinese government in service of the country’s ageing population” and “focus on the trillion-yuan silver economy,” said China Life.

According to the World Health Organisation (WHO), the number of people aged 60 and older in China reached 254 million in 2019 and could grow to an estimated 402 million by 2040.

The country’s increasing life expectancy and declining fertility rates have contributed to the rise in its silver economy, which is expected to reach 30 trillion yuan ($4.2 trillion) by 2035 from about 7 trillion yuan ($968.9 billion) in early 2024, shows data from state-run Xinhua News Agency.

The silver economy-focused fund is the latest mega fund launched by China Life to invest in the healthcare market. Through China Life Private Equity Investment, the insurer previously set up a 20 billion yuan ($2.8 billion) fund in 2021 to bankroll the domestic elderly care industry, investing in senior living communities, integrated medical and nursing institutions, premium retirement homes, and a range of medical data and rehabilitation services providers.

China Life also established the 50 billion yuan ($6.9 billion) China Life Health Fund in November 2016 to invest in healthcare-related sectors, such as life sciences, medtech, digital healthcare, and healthcare services.

With 12 billion yuan ($1.7 billion) raised for its first close, the China Life Health Fund has invested in companies such as pharmaceutical firm WuXi AppTec, biotech developer Innovent Biologics, and medical equipment and solutions supplier Mindray.

Edited by: Deepshikha Monga

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