Zheng Quan Ri Bao·2025-06-13 16:13Core Viewpoint - The recent progress in the long-term investment reform pilot for insurance funds in China is marked by the joint investment of 225 billion yuan by New China Life Insurance and China Life Insurance in the Honghu Zhiyuan Phase III private equity fund, indicating a significant influx of long-term investment funds into the capital market [1][2][3]. Group 1: Investment Details - New China Life Insurance and China Life Insurance each plan to invest 11.25 billion yuan in the Honghu Zhiyuan Phase III fund, which has a total investment of 225 billion yuan [1][2]. - The Honghu Zhiyuan Phase III fund has a duration of 10 years, with the possibility of extension based on contractual agreements [2]. - This investment marks the third collaboration between New China Life and China Life in private equity funds, following previous investments in Honghu Zhiyuan Phase I and II [3]. Group 2: Reform Pilot Expansion - Since the pilot program began in 2023, the scale of long-term investment reform for insurance funds has been expanding, with a total approved scale expected to reach 222 billion yuan upon the completion of the third batch of 600 billion yuan [1]. - The pilot program allows insurance companies to establish private equity funds primarily targeting the secondary market for stocks, promoting a long-term holding strategy [4]. Group 3: Fund Structure and Taxation - The structure of private equity funds is diversifying, with the first fund being a company-type fund and subsequent funds being contract-type funds, which are easier to manage and do not require corporate governance mechanisms [4][5]. - Contract-type funds avoid double taxation issues that company-type funds face, as the tax burden is borne by the fund's shareholders rather than the fund itself [5][6]. Group 4: Market Impact and Future Outlook - The long-term investment reform pilot is expected to help insurance institutions optimize asset allocation, increase equity investment ratios, and act as a stabilizing force in the capital market [6]. - The establishment of private equity funds by insurance institutions is anticipated to enhance their participation in the capital market, potentially leading to a larger scale of funds and institutions involved in the pilot program in the future [6].