Another insurance-backed securities private fund has officially made its debut. Hengyichiying (Shenzhen) Private Fund Management Co., Ltd., under Ping An Asset Management, recently completed its registration with an initial fund size of 30 billion yuan. To date, there are now 7 insurance-backed securities private funds with a combined pilot amount totaling 222 billion yuan.

As listed companies disclosed their 2024 semi-annual reports, the allocation paths of these "giant" long-term funds have gradually become clear—they favor energy and infrastructure leaders such as PetroChina, China Shenhua, and Datong-Qinhuangdao Railway, with distinct characteristics of long-term investment and value investing.

**Another Insurance-Backed Securities Private Fund Completes Registration**

Recently, another insurance-backed securities private fund completed its private fund manager registration. According to information from the Asset Management Association of China website, Hengyichiying (Shenzhen) Private Fund Management Co., Ltd. completed its registration on August 29, with both registered capital and paid-in capital of 300 million yuan, wholly owned by Ping An Asset Management Co., Ltd.

It is understood that Hengyichiying will serve as fund manager to issue contractual private securities investment funds targeted at Ping An Life, with an initial fund size of 30 billion yuan. The fund will focus on the concept of "long-term investment and value investment," prioritizing quality listed companies that align with policy guidance and insurance capital allocation needs.

The first batch of pilot programs for long-term investment reform of insurance funds was approved in October 2023. At that time, China Life and New China Life, as the first batch of pilot institutions, each contributed 25 billion yuan to establish corporate funds with a scale of 50 billion yuan. In January this year, the "Implementation Plan for Promoting Medium and Long-term Capital Market Entry" was issued, proposing to expedite the implementation of the second batch of insurance fund long-term equity investment pilots, and gradually expand the scope of participating institutions and fund scale. Subsequently, PICC Life and PICC Asset Management were approved to participate in the second batch of pilots through contractual fund arrangements.

To date, 7 insurance-backed securities private funds have been approved. The insurance fund long-term investment reform pilot has had three batches, with a combined pilot amount totaling 222 billion yuan.

**Latest Holdings Disclosed**

According to information from the Asset Management Association of China website, 6 insurance-backed private securities investment funds are currently in operation, including Guofeng Xinghua's Honghu Zhiyuan Fund Phase I, II, III-1, III-2, Taikang Wenxing Phase I Fund, and Taiping Zhiyuan No. 1. With the disclosure of listed companies' 2024 semi-annual reports, the holdings of some of these funds have come to light.

Wind data shows that at the end of the second quarter, Guofeng Xinghua Honghu Zhiyuan Phase II Private Securities Investment Fund newly became the 6th largest circulating shareholder of PetroChina A-shares, holding over 217 million shares, with a market value of approximately 1.857 billion yuan based on the stock price at the end of the second quarter. Additionally, the fund newly became the 9th largest circulating shareholder of China Shenhua A-shares, holding over 52 million shares, with a market value of approximately 2.116 billion yuan based on the stock price at the end of the second quarter.

China Petrochemical's announcement on August 26 regarding "Pre-Share Buyback Top Ten Shareholders and Top Ten Unrestricted Shareholders Holdings" showed that as of August 21, Guofeng Xinghua Honghu Zhiyuan Phase III Private Securities Investment Fund No. 1 ranked as China Petrochemical's 8th largest shareholder, holding 305 million shares, corresponding to a market value exceeding 1.7 billion yuan. Datong-Qinhuangdao Railway's related buyback announcement published on September 2 showed that as of August 28, Honghu Zhiyuan Phase III No. 1 newly became the 4th largest shareholder, holding 298 million shares, corresponding to a market value exceeding 1.9 billion yuan.

Furthermore, Honghu Zhiyuan (Shanghai) Private Investment Fund Co., Ltd. (i.e., Honghu Zhiyuan Fund Phase I) continued to appear among the top ten shareholders of Yili Group, Shaanxi Coal Industry, and China Telecom at the end of the second quarter, with shareholdings remaining unchanged from the previous quarter.

**Distinct Long-Term Value Investment Characteristics**

Recently, New China Life's semi-annual report disclosed partial operating conditions of Honghu Zhiyuan Fund Phase I. As of June 30, its total assets reached 57.112 billion yuan, with net assets of 55.684 billion yuan; operating revenue for the first half of the year was 1.203 billion yuan, operating profit was 1.175 billion yuan, and net profit was 968 million yuan.

New China Life's semi-annual report disclosed that the Honghu Zhiyuan series funds implement long-term investment concepts, obtaining steady dividend income through low-frequency trading and long-term holding. In May this year, China Life also stated that Honghu Fund Phase III will consistently adhere to market-oriented, rule-of-law principles and "long money, long investment" principles and framework, insist on the long-term capital attributes of insurance funds, and persist in viewing capital market trends with high-quality development concepts. It will invest in and hold for the long term large-cap blue-chip stocks with good corporate governance, steady operations, relatively stable dividends, relatively good stock liquidity, and good dividend returns, further reducing the impact of short-term stock price fluctuations on insurance companies' financial statements and promoting long-term, stable, and sustainable investment returns.

Industry insiders believe that insurance companies entering the market through establishing private securities investment funds helps leverage the advantages of insurance capital's long-term investment characteristics and supports the capital market. Long-term investment and value investment represent the consistent and distinct investment philosophy of insurance capital.

Previously, Taiping Asset Management also stated that establishing a private securities investment fund company aims to actively respond to the insurance fund long-term investment reform pilot. Going forward, it will strictly regulate fund operations and management, establish and improve long-cycle assessment mechanisms and investment strategies that match insurance fund characteristics, fully leverage the role of insurance funds as long-term capital and patient capital, further increase medium and long-term capital investment in the capital market, firmly serve national strategies and the real economy, and better play the role of insurance funds as stabilizers and ballast stones.