Funds News
- Pension fund faces hurdles in PE buys
Date: 23-Nov-2007 Sources: (Shenzhen Daily)
THE country's national pension fund still faced regulatory hurdles in taking stakes in overseas private equity (PE) funds, at a time it was studying ways to diversify its overseas investments, the fund's top manager said in a recent interview with CNBC.
China Social Security Fund Chairman Xiang Huaicheng said the fund was always studying alternative investments, including investments in various industries, the property sector, as well as making private equity-type investments.
However, Xiang said the pension fund still faced barriers to taking stakes in overseas private equity funds, as such investment was 'still not within our investment scope?defined by regulations.
The Financial Times reported in late October the national pension fund had held preliminary talks about buying stakes in companies such as Carlyle and Kohlberg Kravis Roberts. But Xiang said it hadn't been involved in any discussions with potential targets in the sector.
'The Financial Times report makes it sound like I'm already in talks. I talk to lots of people! I visit everyone on my overseas trips, and they visit me in Beijing - as friends,'Xiang said.
'If I want to hold talks (with private equity funds), I'd have to clear the legal hurdles first, right now we're not at that stage,'he said.
But he said the pension fund would definitely invest more overseas to spread risk.
Currently, the fund had invested overseas a total of only US$1.6 billion. That was less than 5 percent of its total assets under management, much lower than the maximum 20 percent allowed by the government, said Xiang.
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