To seize the new opportunities made available to insurance asset management companies by new policies on insurance investments in the “Big Asset Management” era, China Re AMC have established specialised teams to conduct portfolio management, fixed-income and equity investments, alternative investments, overseas investments, third-party asset management business and development of insurance asset management products. By continually promoting the development of dedicated sub-platforms, we have steadily improved our investment management capabilities
We conduct our asset allocation based on conditions of the macroeconomy and the capital market. Our asset allocation prioritises risk management, follows the basic principle of asset-liability management and conforms to safety, liquidity and profitability requirements, while taking into full considerations a number of constraints, such as regulations, risk appetite, liability characteristics and solvency margin ratio. We coordinate the Group’s strategic asset allocation at the Group Company level, and China Re AMC formulates the Group’s tactical asset allocation and conduct portfolio management accordingly. We regularly review our asset allocation and make necessary adjustments in order to achieve dynamic optimisation of our allocation based on the market conditions and business practices.
We conduct the strategic asset allocation of the Group’s insurance funds under the guidance of the Group’s asset-liability management committee. As the entrusting parties, the Group Company and the subsidiaries will decide on the strategic allocation of assets based on their respective target returns, risk budgeting and business performance, and incorporate these considerations in the investment guidelines and entrusting agreements with China Re AMC in the form of investment goals and investment scope, annual asset allocation plan, investment restrictions and risk management requirements.
Within the scope of strategic asset allocation, China Re AMC is responsible for the tactical asset allocation. China Re AMC will take into account relevant regulations, target returns, investment guidelines of the entrusting parties and features of their respective funding sources, risk appetite and liquidity requirements, and provide tailored asset allocation solutions based on macro policy research and market conditions, aiming to satisfy the entrusting parties’ investment requirements and to maximise investment returns.
Portfolio management is crucial to the implementation of the tactical asset allocation and the dynamic optimisation of our investment portfolio. We have a dedicated portfolio management team at China Re AMC responsible for the formulation of tactical asset allocation strategies, management of the investment return targets, dynamic tracking of the portfolio and optimisation of allocation, and risk management of the portfolio. We have established an inter-department mechanism for research and communications on topics including macroeconomy, capital market and allocation strategies, and we formulate our tactical asset allocation strategies based on the characteristics of insurance funds and our analysis of the investment portfolio. We have also established a relatively comprehensive investment portfolio tracking and analysis framework to identify issues in the investment portfolio in a timely manner and provide alerts on the relevant risks of the investment portfolio, and have largely achieved specialised and dynamic management of asset allocation and investment portfolio.
Fixed-income and Equity Investments
We conduct traditional asset management businesses such as fixed-income investments and equity investments through specialised teams that are dedicated to such major investment categories, and we have accumulated extensive investment experience in this aspect. In terms of fixed-income investments, we have been continuously enhancing our research and credit assessment on fixed-income products as well as improving our investment decision-making capabilities. With the gradual liberalisation on the investment scope of insurance funds in recent years, and on the basis of traditional fixed-income products such as bank deposits and bonds, we have gradually expanded our investment scope under strict control towards securitised financial products such as debt investment schemes, trust schemes and project asset-backed schemes, further optimising our fixed-income asset allocation structure. In terms of equity investments, China Re AMC has been actively recruiting professional talent in recent years and has built an integrated investment, research and management team. China Re AMC attaches great importance to the diversification of investment style and improvement of active management capabilities, consistently works towards the integration of investment and research, fully exploits the investment value of individual shares, and has achieved favourable investment performance.
We have built a specialised team to conduct alternative investment and management business in a prudent and systematic manner and have formed a diversified investment portfolio. Under this business, we conduct equity investments in domestic and overseas private equity investment funds, venture capital funds, and unlisted entities. Most equity funds we invested in are managed by well-known domestic and overseas private equity fund managers, and our equity fund portfolio has achieved diversification in terms of sectors, geographical regions and strategies. We also actively conduct direct private equity investments and select investment projects matching our investment strategy and allocation requirements in order to further enhance diversification of our portfolio. In terms of real estate investments, we are focused on commercial properties or land plots located in the central districts of first-tier cities in China. We have also started to acquire overseas real estate through investments in overseas real estate funds. The constant optimisation of our alternative investment portfolio will help improve our long-term overall investment returns.
We have won a number of industry recognised honours in recent years for our alternative investment business. In 2014, China Re AMC was awarded “CLPA 2013-2014 Best Limited Partner in China of the Year” and “CLPA 2013-2014 Insurance Funds Management Team of the Year (Alternative Asset Management Team)” by China Limited Partners Associates (“CLPA”). In 2015, China Re AMC was awarded “CLPA 2014-2015 Institutional Investor of the Year (Alternative Asset Management Team)”. In addition, China Re AMC was awarded “Top 10 Best Limited Partners in China of the Year” for two consecutive years in 2013 and 2014 by China Venture.