The Insurance Bureau is amending regulations to loosen controls over insurers' investments in private equity funds, Cathay Securities Investment Trust Co (Cathay SITC) Chairman Jeff Chang has said.
He said this as Cathay SITC is poised to become the first asset manager in Taiwan to set up its own private equity (PE) firm since the Taiwanese regulator recently allowed local fund houses to participate in the PE business. Cathay SITC is one of the main asset managers for Cathay Life Insurance, the insurance arm of Cathay SITC’s parent group, Cathay Financial Holdings.
Cathay SITC said in a statement last month that it plans to establish a wholly-owned PE firm, with a registered capital of NT$50 million (US$1.64 million), by the end of January 2018, reported Asia Asset Management.
“The first fund raised by the PE firm will invest in innovative industries such as alternative energy and water resources,” Mr Chang said.
“We will look into the investment projects with long investment horizons, low risk and stable long-term returns,” he added.
He says the PE fund will introduce yield-seeking domestic institutional investors, such as insurance companies, to local infrastructure projects. Currently, insurers have to seek regulatory approval to invest in PE funds.