2020.11.16 CoStone Capital Views:
On November 16, 2020, Insurance Asset Management Association of China(IAMAC) released the the evaluation of private equity investment fund managers for insurance fund investment, and CoStone made the Class A list.
On November 16, 2020, Insurance Asset Management Association of China(IAMAC) released the the evaluation of private equity investment fund managers for insurance fund investment, and CoStone made the Class A list.
On November 13, China Banking and Insurance Regulatory Commission(CBIR) issued Notice on Financial Equity Investment of Insurance Funds, lifting the restriction of insurance funds on financial equity investment. Now such investment is no longer limited to insurance companies, non-insurance financial institutions or insurance-related pension industry, medicare and automobile services. A total capital of nearly ¥20 trillion awaits opportunities.
It is highly relevant that IAMAC chose to announce its evaluation of private equity investment fund managers at this timing, and it will also be significant for the industry’s future. The evaluation is highly professional with scientific indicators: The 9 primary indicators include: Company governance and investment team, management system, risk control, scale and performance, post-investment management, lawful operation, insurance cooperation, incentive and restraint, and information disclosure. Supplemented by an additional 50 secondary indicators, a comprehensive evaluation of the company is provided.
The evaluation aims to improve services of private equity investment fund managers for insurance fund investment, and is from the prospective of insurance institutional investors. Guided by rules and regulations of the industry, IAMAC has conducted evaluation of 143 PE fund managers based on their annual performance. (The evaluation is for the reference of insurance institutions, and shall not be used to guide investment decision, nor shall it be used for horizontal competition among PE fund managers). Based on evaluation indicators and standards, evaluated managers are divided into four classes from A to D, and result shows that 76 companies were awarded Class A.
IAMAC has previously issued Evaluation Rules for Private Equity Investment Fund Managers of Insurance Fund Investment (Trial) in March, 2019. The 19th item mentioned that IAMAC would establish a market-oriented management mechanism for different classes based on evaluation result.
Many established General Partners in the industry has made the list, such as Sequoia Capital, CICC and CoStone.
In addition, China Venture Capital Commission and the China FOF Alliance launched the Trustworthy Whitelist for the first time in the Chinese equity investment industry.
As of November 16, the 7th Trustworthy Whitelist of Chinese equity investment fund managers was issued. In total, 40 government-guided fund managers, 35 market-based FOF managers, 20 early-stage investment fund managers, 38 venture capital fund managers, and 30 PE fund managers. CoStone Capital is also on this list.
PE investment features long-term investing and resilience against economic cycles, which is compatible with insurance capitals. Currently only ¥2.2 trillion of the ¥20 trillion total is invested in corporate bonds, and PE investment is even less, which marks a huge potential for PE fund managers, and leading companies with abundant resource and steady performance will be favored. The new policy has provided new opportunities, which would promote further collaboration between LP and GP.
Rewritten by: Xue Guanda, Edited by: Du Zhixin, Li Yunzhen
Over the past year, the bull market returned, with technology leading the way.
As I said back in October 2024, the rally that began on September 24 was not merely a rebound, but a reversal. Since then, China's capital markets have undergone a broad revaluation, moving from undervaluation toward fair value.
The Shanghai Composite Index reached its highest level in a decade. The "Yi-Zhong-Tian" trio—Eoptolink, Zhongji Innolight and TFC Communication, three prominent Chinese optical communications stocks—saw their share prices multiply severalfold in a single year. Cambricon's market capitalization briefly exceeded RMB 600 billion. Elsewhere in the technology sector, triple-digit price-to-earnings ratios and valuations exceeding RMB 10 billion became commonplace.
Some investors were greedy; others, fearful. Still others asked me: Are technology stocks in a valuation bubble?
My answer is that what we are witnessing is the hunger and anxiety of an era, reflected in the capital markets. Once you understand this, the current fervor for technology investing is no longer difficult to explain.
Investment has nothing to do with macroeconomics, but everything to do with geopolitics.
China-US relations will shape the investment landscape for decades to come. Geopolitics has played a major role in shaping the hunger and anxiety of our times, fundamentally reshaping the way we invest.
What, then, lies at the heart of China's hunger and anxiety?
The Fourth Industrial Revolution is already underway, yet China has not fully overcome the technological shortcomings left by the Third. There is no time to lose.
This is why some people wonder: Why do Chinese computing chip companies command such high valuations when their technologies still lag so far behind NVIDIA's? Why does NVIDIA trade at just 50 times earnings, while a company hailed as "China's answer to NVIDIA" commands a multiple of 300?
To me, this gets the logic exactly backward.
It is precisely because these companies cannot catch up with NVIDIA in the near term that they command a higher strategic premium. The wider the technological gap, the greater the strategic value.
The further something lies beyond our reach, the stronger our hunger. The harder it is to catch up, the deeper our anxiety. If China were to achieve a complete breakthrough in computing chips one day, valuations might actually come down.
Where can one find China's most spectacular natural landscapes?
Much of the answer, I believe, lies in and around the Hengduan Mountains: the Meili Snow Mountains, Jade Dragon Snow Mountain, Mount Gongga, Mount Siguniang, Jiuzhaigou, and many others. Vast differences in elevation and deep fault lines have given rise to landscapes of extraordinary grandeur.
Hard-tech investing follows a similar logic.
Technological gaps, discontinuities in capabilities, and missing links in industrial systems: a leap in difficulty brings a leap in valuation, and a successful breakthrough can, in turn, bring a leap in returns.
This logic extends well beyond computing chips. It is equally evident in memory semiconductors, commercial spaceflight, and other sectors where China still faces substantial technological gaps with other countries.
It was precisely this conviction that led CoStone Capital, starting in 2016, to decisively focus its investments on three areas: hard tech, emerging industries, and life sciences and healthcare. In this context, "hard tech" refers specifically to important industries in which China faces a technological gap with the United States.
Thanks to this forward-looking strategy, CoStone Capital established an early presence across the full value chains of key sectors, including semiconductors, artificial intelligence, and robotics.
Looking ahead, the frontiers of technological progress and industrial upgrading are boundless. Nor can the gaps in hard technology be closed overnight. The twin windows of opportunity presented by technological innovation and the development of homegrown alternatives to foreign technologies have only just begun to open.
The road ahead is long, but the future holds immense promise.
As an investment firm, CoStone Capital will continue to invest where the hunger and anxiety of each era run deepest, move forward with the tensions that shape our times, and extend our reach toward the most challenging—and most important—frontiers.
Spring 2026