UN Principles for Responsible Investment Boasts 800 Signatories

(September 7, 2010) — The United Nations Principles for Responsible Investment now has more than 800 signatories.

“Reaching 800 signatories with more than $20 trilion in assets after four years is a great achievement for the PRI,” the UN PRI’s Executive Director James Gifford told the Responsible Investor. “The PRI is now seen as an emerging norm in many parts of the investment industry. Client pressure from the PRI’s asset owner signatories is certainly a key factor driving the PRI’s growth in signatories. But it is also driven by the natural growth of responsible investment, and other initiatives such as Ceres and Carbon Disclosure Project are also growing strongly.”

Gifford added that the PRI is “under no illusions” about how much is needed before current best practice is implemented “across asset classes and in all major capital markets around the world.”

The principles were launched by then U.N. Secretary General Kofi Annan at the New York Stock Exchange in April 2006. Of the UNPRI’s total of 803 signatories, 208 are asset owners, 440 are investment managers and 155 are service providers, according to the latest figures on its website.

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To contact the <em>aiCIO</em> editor of this story: Paula Vasan at <a href='mailto:pvasan@assetinternational.com'>pvasan@assetinternational.com</a>; 646-308-2742

China has approved insurers to hold stakes and invest in private equity and property of privately-held companies to ease insurers' investment pressure and diversify risks, according to the the China Insurance Regulatory Commission.

(September 7, 2010) — China will allow its $661 billion insurance industry to expand their investment channels into private equity and real estate to reduce investment risks, which could provide up to $100 billion in fresh funding for unlisted firms and the property sector, according to the China Insurance Regulatory Commission (CSRC).

According to rules published on the website of the CSRC, Chinese insurers are permitted to invest up to 5% of their total assets in private equity and related financial products, and 10% in real estate.

“The rules would enable insurers to better match their assets and liabilities, improve asset allocation, ease investment pressure, diversify risks, and protect asset safety as well as the interests of policy-holders,” the CIRC said in the statement.

Additionally, the regulator said that insurers are not allowed to acquire stakes in venture capital firms, as well as companies that the government has classified as polluting and energy-intensive, or those with poor cash returns. The CIRC also noted that for real estate investments, insurers cannot invest in commercial properties, directly participate in real estate development or invest in setting up real estate companies.

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The move represents the effort among insurers to escape from the stock-market and instead seek alternatives to increase investment returns. The new rules could raise money more easily into China, boosting long-term investment returns for insurers including China Life and Ping An, and could translate to positive news for US buyout houses Carlyle, TPG and Blackstone, which have all been making moves into the country. While TPG launched two $740 million funds in the last week of August in Shanghai and Chongquing, Blackstone set up a $740 million fund with the Shanghai government in August 2009, Alt Assets reported.

“The launch of detailed rules, which set a clear practical guideline for insurers, is good news for the commercial sector, especially for the en-bloc sales market,” Grant Ji, director of the investment department of real estate service provider Savills (Beijing), told the China Daily. “How fast insurers’ influence grows depends on the market situation and the maturity of their investment teams.”

To contact the <em>aiCIO</em> editor of this story: Paula Vasan at <a href='mailto:pvasan@assetinternational.com'>pvasan@assetinternational.com</a>; 646-308-2742