ICBC-Axa Life says PE funds could be a 'buy' next year

The third-largest life insurer in China looks set to increase its private equity allocation, chiming with regulator efforts to get insurers to use their assets to support economic growth.

The Chinese insurer plans to focus more on collateralised loan obligations and loans, even as the credit cycle looks to be turning.

The Chinese authorities are encouraging insurers to invest more in private equity funds, but the chances of success are debatable.

With so much money piling into unlisted debt, attention is now turning towards what might happen when the credit cycle turns, and what investors can do to tackle liquidity challenges.