China Life Exec To Lead CITIC PE Fund

SHANGHAI/BEIJING (Reuters) – China Life’s (2628.HK: Quote, Profile, Research, Stock Buzz) chief investment officer has been appointed chairman of the private equity arm of CITIC Securities (CITICS) (600030.SS: Quote, Profile, Research, Stock Buzz), China’s top brokerage, two sources with direct knowledge of the matter said on Tuesday.

Liu Lefei had met staff at CITICS Private Equity Funds Management Co Ltd and senior executives of CITIC Group had been informed of his appointment, said the sources, who declined to be identified as they were not authorised to speak to the media.

“Private equity is hot in China but it is a new business to CITIC Securities,” one of the sources said.

“CITIC invites Liu to join because it has very high hopes on the prospect of its private equity business, part of the group’s plan to diversify its profit streams,” he added.

CITIC Group is China’s top financial conglomerate and controls CITIC Securities and CITIC Bank (601998.SS: Quote, Profile, Research, Stock Buzz) (0998.HK: Quote, Profile, Research, Stock Buzz).

Liu was in the process of leaving China Life Insurance Co Ltd (601628.SS: Quote, Profile, Research, Stock Buzz) and the country’s top life insurer had not yet decided on his replacement, the sources said. Liu would remain China Life’s chief investment officer “for a while”, they added.

His replacement will help the insurer to manage and invest part of its more than 1 trillion yuan ($146.4 billion) of assets.

Liu declined to comment when contacted by Reuters by telephone. Officials at CITIC Securities also declined to comment.

DEALMAKER

Earlier this year, CITIC Securities won government approval to launch a 6 billion yuan industrial investment fund, in which CITIC Securities will be a major investor. The fund will be managed by CITICS Private Equity Funds Management Co Ltd.

Liu, 35, is well known in China’s financial world for landmark deals, including a joint bid by China Life and Citigroup Inc (C.N: Quote, Profile, Research, Stock Buzz) for Guangdong Development Bank in 2006.

Liu was a chief negotiator on behalf of China Life on the bid, and the consortium — led by Citigroup and China Life — won control of the Chinese bank in a $3.1 billion deal, beating rival bidders Societe Generale (SOGN.PA: Quote, Profile, Research, Stock Buzz) and Ping An (601318.SS: Quote, Profile, Research, Stock Buzz) (2318.HK: Quote, Profile, Research, Stock Buzz), China’s second-largest life insurer.

Before he joined China Life, Liu worked for China’s Ministry of Finance and Galaxy Securities, where he was in charge of its asset management business.

China has at times been at odds with global private equity firms, thwarting moves by foreign investors that have vied for stakes in industries deemed to be strategically sensitive.

But Beijing has pledged this year to develop private equity funds, especially yuan-denominated funds run by domestic managers, to reduce companies’ dependence on bank financing. CITICS Private Equity is expected to complete the 6 billion yuan fund-raising of the industrial investment fund before the end of this year, the first such private equity fund to be run by the firm, and it will focus investments on new energy, manufacturing and consumer sectors, the sources said. ($1=6.832 Yuan)

By George Chen and Eadie Chen
(Editing by Anne Marie Roantree)