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Asia-Based Insurance Companies Investing in Private Equity - April 2013

by Yong Xiang Pua

  • 12 Apr 2013
  • PE

There are 50 Asia-based insurance companies that are investing in the private equity asset class, of which 38 insurers in the region are looking to make their next commitment in the next 12 months. The remaining 12 Asia-based insurance companies maintain a longer-term investment horizon with regards to new private equity fund investments. Collectively, these 50 private equity investors allocate $6.5bn to the private equity asset class, making insurance companies a significant investor type in Asia. There are seven other insurers in Asia that have yet to make their maiden private equity commitment but have expressed an interest in doing so.

South Korea and Japan are both home to a large proportion of Asia-based insurers that are interested in the private equity asset class; more than half (56%) are based in the Far East region. A further 18% are based in China, while 14% of the insurance companies are located in India. The remaining 12% are headquartered in the ASEAN region.

Buyout is the most favoured fund type among Asia-based insurers (67%) investing in private equity. The next most favoured fund type is growth, with 60% of insurance companies in Asia considering growth funds when seeking their next private equity commitment. Venture capital funds, which encompass both generalist and stage-specific funds, attract 47% of the Asia-based insurance companies. Other fund types considered by insurers in Asia include distressed private equity (37%) and mezzanine (23%). Thirty-three percent of insurers in Asia are willing to consider funds of funds to seek exposure to the private equity asset class.

Only 19% of Asia-based insurance companies are willing to invest with first-time funds, of which 3% only commit to first-time funds raised by spin-off teams. While 26% of their peers have yet to commit to a first-time vehicle, they are willing to consider such funds on a case-by-case basis. The remaining majority (56%) will not invest in first-time funds. Forty-three percent of insurance companies in Asia are willing to co-invest alongside private equity fund managers and 68% will consider funds that have yet to hold a first-close.

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