Insurance Funds Actively Deploying in Hard Tech Sector: Seeking New Pathways to Balance Returns and Risk in Low Interest Rate Environment

In the wave of technological innovation and industrial upgrading, insurance funds are actively participating through diversified investment strategies, becoming a key force driving the development of new productive forces. Especially in cutting-edge fields like computing power and robotics, the deployment of insurance capital not only reflects a strategic shift in asset allocation but also demonstrates a commitment to supporting the country’s technological innovation strategies. Recently, China Life Investment’s managed China Life Dual Carbon Fund led the Series C financing of Fao Yiwei (Suzhou) Robot Systems Co., Ltd., exemplifying this trend.

Insurance funds’ investments in the technology innovation sector are not limited to the primary market. They are also active in the secondary market. Take Lankeng Technology as an example—this company, focused on data processing and interconnect chip design, went public on the Hong Kong Stock Exchange, with Taikang Life serving as a cornerstone investor, showing long-term confidence in the hard technology sector. Through indirect investments such as private equity funds, insurance capital also widely participates in popular market players. For instance, Yushu Technology, in its pursuit of becoming the first A-share “humanoid robot,” has multiple insurance companies involved as limited partners in private equity funds, indirectly holding shares.

The reason why insurance funds are heavily investing in these frontier technology sectors is rooted in deep logic. In the current macro environment of low interest rates and asset scarcity, insurance capital needs to balance asset-liability matching with the pursuit of long-term stable returns. Fields like computing power and robotics not only align with national strategic directions but are also in the early stages of industry explosion, demonstrating resilience through economic cycles. By engaging through professional vehicles like private equity funds, insurance capital can control risk exposure while sharing the long-term capital appreciation brought by technological innovation, optimizing the overall risk-return profile of their investment portfolios.

However, investing in hard technology enterprises also presents many challenges for insurance funds. The high risk of tech innovation investments conflicts with the long-term liabilities inherent in insurance funds. Especially under strategies of “early-stage” and “small-scale” investments, early-stage tech companies often have long R&D cycles and immature business models, concentrating risks. The specialized nature of technology investments also demands higher capabilities from the investment teams. In areas such as industry technology assessment, valuation, and post-investment empowerment, insurance funds generally lack experience, making it difficult to accurately identify technological and commercialization risks.

To become truly long-term, patient capital, insurance funds need to build a dedicated risk management system across the entire investment process—pre-investment, during investment, and post-investment. Before investing, insurance companies should establish independent industry research teams and technical due diligence mechanisms, avoiding the simple application of traditional credit evaluation models. During the investment process, they need to strengthen due diligence and valuation monitoring, set strict investment caps and concentration limits, and use structured designs to balance risk and return. Post-investment, they should develop long-term assessment mechanisms aligned with the laws of technological innovation, introduce professional post-investment empowerment resources, and improve valuation models and risk warning systems for non-listed equity, ensuring risks are measurable, controllable, and manageable.