China Life Insurance CIO Liu Lefei is set to leave the firm to become chairman of Citic Private Equity Funds Management, which is part of Citic Securities. China Life and its parent company owns 15.8% of Citic Securities, the mainlandÆs largest brokerage.

The move makes sense because Citic Securities is expanding its private equity business, which it set up only in June last year after receiving direct approval from the National Development & Reform Commission (NDRC). That made Citic Private Equity Funds the first private equity fund not under the control of the government. It is understood that the private equity firm received seed money of Rmb6 billion ($878 million) from ChinaÆs National Social Security Fund.

Citic Private Equity Funds was registered with Rmb100 million ($14.7 million) in capital in Mianyang, the second largest city in Sichuan province in western China and the site of a technology park the firm plans to invest in. Mianyang is a major electronic industry centre û referred to as ChinaÆs Silicon Valley û and has been noted for its beautiful scenery, long history, and deep cultural roots. The city is also known for the concentration of defence contractors and its expertise in converting military technology for commercial use in China. It received international attention last year, however, for being among the most severely affected by the Sichuan earthquake in May.

Other funds that previously received similar support from the NDRC include: Bohai Industrial Fund, a project initiated by Dai Xianglong during his capacity as mayor of Tianjin (who is now the chairman of the NSSF); and China-Belgium Direct Equity Investment Fund, a joint venture between the Chinese and Belgium governments.

Liu joins around two dozen senior executives that have exited ChinaÆs insurance industry this month, a period when contract renewals and negotiations are at their peak.

China Life has not yet identified a replacement for Liu, who has been with the insurance firm since 2004.

During his tenure at China Life, he steered the state-owned insurer towards having exposure in the US. China Life became VisaÆs largest stakeholder after it bought $260 million worth of shares when the credit card company went public in March 2008. China Life also has a presence in Hong Kong through a joint venture with Franklin Templeton named China Life Franklin Asset Management.

Prior to being put in charge of China LifeÆs $125 billion portfolio, he had a steady ascent in his career from a researching economist role at the Ministry of Finance to management roles at Zhongye Anxin Industrial, Beijing Galaxy Investment Advisors and Galaxy Securities. He was also previously a board director at the Guangdong Development Bank.

Liu graduated with a bachelorÆs degree in economics from the Renmin University of China and completed a graduate degree from the Graduate School of the Chinese Academy of Social Sciences in 1998. In 2006, he received an MBA in finance from the China Europe International Business School.

China Life issued a profit warning yesterday, noting that it expects its 2008 profit to fall 50% compared with the previous year.

According to Standard & PoorÆs, less than 3% of China LifeÆs AUM is in foreign assets and its exposure to troubled foreign assets is limited. The rating agency says the companyÆs investment strategy remains conservative and its asset-liability management ability remains constrained by local regulatory restrictions and the under-development of domestic capital markets.