Pension fund bullish on PE outlook


China's national pension fund has invested heavily in private equity funds and seen a bright future in the sector, Dai Xianglong, chairman of the National Social Security Fund (NSSF), said Sunday.

The NSSF has injected 19.5 billion yuan (3.1 billion U.S. dollars) into 13 private equity funds by the end of 2011, making up 31 percent of the total capital raised by those funds, Dai said in Beijing at an equity investment forum.

China's private equity is a budding sector and has a promising prospect, he said, citing its remarkable expansion last year.

In 2011, 230 private equity funds raised a total of 252.6 billion yuan, up 40 percent from a year earlier.

Meanwhile, with potential immense investment from pensions, commercial insurances and high-end individual clients, growing number of fund managers and a slew of exit channels, the country's private equity sector is embracing the best time for development, Dai said.

Boosting the sector is not only good for accumulating social capital, but also conducive to the ongoing economic and industrial restructuring, especially helping support small and mid-sized businesses, he added.

The NSSF, which manages the national pension fund on behalf of the central government, has over 850 billion yuan in assets. Based on relevant rules, as much as 10 percent of its funds can be invested in equity stakes.

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