Investor conferences – do the big Taiwan insurers find private equity funds there?
Conferences with international managers provide Taiwanese life insurers with exposure to offshore market opportunities (Clement Souchet/Unsplash)
Nearly every month the parent company of at least one massive Taiwanese life insurer publicly announces plans to attend an investor conference held by a multinational investment bank.
Then, often within a few weeks, the insurer reveals plans to park tens of millions of US dollars in an American or European private equity fund.
The insurers won’t confirm a correlation, nor do event hosts such as Bank of America, Citi and Goldman Sachs. Attendance may be by invitation only and name lists aren’t made public. What goes on at these events for the bank’s clients is private.
But analysts who follow the banks say it’s likely that investors such as Cathay Life Insurance, Fubon Life Insurance and Taiwan Life Insurance meet private equity fund managers at these events, especially if those managers are also bank clients.
The problem for Taiwan’s asset owners is that they have little other exposure to funds domiciled in Western countries.
Funds that invest in infrastructure, secondaries and property are often available to meet insurers, he added.
Conferences with international banks offer “relationship-building opportunities which they cannot obtain domestically,” Hu said.
The reason for this is that the domestic market for these funds is so small.
“They will benefit a lot because these conferences are among the main channels through which Taiwanese insurers get exposure to global alternative investment opportunities.”
Participants at investor bank conferences talk about markets, economies and new products including the “flavour of the month”, said Li Kwong, head of Asia Pacific business management for Fitch Ratings. He has attended conferences himself.
“It allows the attendees to have a different perspective and talk to someone they would not normally be speaking with,” Li said.
He said Taiwanese asset owners would be keen to meet investment bank clients from overseas to find ways of increasing their capital bases.
“There’s a major networking component,” a Hong Kong-based economics research director said. “The fund managers and insurers would both attend presumably because they would both do a lot of trading with the investment banks putting on the conference.”
Alicia Garcia Herrero, chief Asia Pacific economist with the French investment bank Natixis, said she also had noticed Taiwanese insurers meeting fund managers at the conferences.
The insurers form “direct relationships” with general partners in charge of funds, said Hu Jin-li, a professor at the Institute of Business and Management at National Yang Ming Chiao Tung University in Taipei.
In mid-June, Fubon Financial Holding Co, Yuanta Financial Holdings and CTBC Financial Holding Co – parent companies of major Taiwan life insurers – announced on the domestic stock exchange they would attend the Goldman Sachs Asia Financials Corporate Day scheduled for the same month.
By late June, Fubon Financial had announced Fubon Life Insurance, which has $170bn in assets, would place $50mn in the RedBird Capital Partners Financial Services Fund I for buyouts, $45mn in the 8VC Fund VII venture capital fund and $9mn in the Transpose Platform BOV III Seed Cayman venture capital fund.
Cathay Financial Holdings, the parent of Cathay Life Insurance, acknowledged an invitation on May 6 to a JPMorgan Securities conference.
And by mid-May, the holding company posted notices that Cathay Life – which has roughly $250bn in total investible assets – had placed $30mn in Iconiq Strategic Partners VIII-B private equity fund for software company expansions and $50mn in the Lexington Private Equity Cavalry fund, which is operated by a specialist in secondaries.