Taiwan’s Cathay Life Insurance has received regulatory approval to invest US$50 million in a private equity fund overseen by US manager KKR & Co, raising the insurer’s total private equity investments to $353 million in five foreign buyout funds thus far in 2020.
The KKR Asian Fund IV mainly focuses on private equity deals in the Asia Pacific region, Cathay Life says in a statement on May 26.
Its other private equity investments this year include buyout funds focusing on North America and Europe.
Large Taiwanese life insurers like Cathay Life are expanding their investments into foreign private equity because their investment portfolios have grown significantly, according to Anthony Lam, associate director for insurance at Fitch Ratings.
“Insurers favour private equity investments as they carry lower risk charge compared to other alternatives such as hedge funds,” Mr. Lam tells Asia Asset Management.
Life insurance assets in Taiwan rose to NT$29.3 trillion ($975.2 billion) last year from NT$26.3 trillion in 2018, according to figures from the Taiwan Insurance Institute.
Cathay Life had NT$6.97 trillion of total assets as of March 2020.