Taiwan’s Cathay Life Invests in Blackstone Capital

Cathay Life Insurance has invested $100 million (67.7 million euros) in Blackstone Capital Partners VI, a private equity fund of New York-based Blackstone Group. The investment pursued by its holding company Cathay Financial Holding accounts for less than 0.5% of the insurer's total overseas invested assets.

In announcing the investment, the insurer cited global and local stock markets fluctuations that are affecting insurance companies' investment strategies in Asia. "Given the nature of life insurance company, we always aim at asset-liability management. We are focusing more on high quality fixed income investment and high yielding with promising industry outlook equity investment," said a Cathay Life spokesperson.

Taiwan's largest insurer, Cathay Life, had total assets of NT$ 2.1 trillion (45.1 billion euros) in its investment portfolio at the end of June, in which 2.3% of the assets are invested on overseas equity and 32.1% on overseas fixed income.

Cathay Life said its investment strategy is to diversify its invested assets into a variety of portfolio products such as stocks, mutual funds, exchange-traded funds, mortgage-backed securities, government bonds, super-national bonds, and corporate bonds in a bid to leverage risk factors.

Among domestic investments, Cathay Life acquired a building property in Taipei's Neihu district for NT$3 billion in August. "Our strategy on real estate management aims at long term value and to earn consistently stable rental income," the insurer's spokesperson said.

The Taipei-listed insurer also raised NT$15 billion in June from local stock market by issuing 200 million new shares at NT$75 per share through its holding company.

Cathay Life said its business expansion focuses on the China and Vietnam markets in an effort "to replicate our successful experience in Taiwan, not only life but also nonlife and banking business." The insurer was the first Taiwan insurance company to open offices in Ho Chi Minh City and Hanoi in Vietnam. In China, Cathay Life now operates 25 branches in seven provinces since its entry into the market early 2005.

(By Iris Lai, Hong Kong bureau manager: [email protected])