"Honghu Fund," the "benchmark for insurance funds," "finalizes" a principal of 92.5 billion

As a benchmark for long-term stock investment pilot projects of insurance funds in China and a "new leader" in the private equity circle, Honghu Fund has made new progress!

According to the announcement from NCI: On July 4, 2025, the company signed the "Guofeng Xinghua Honghu Zhiyuan Phase III Private Securities Investment Fund No. 1 Fund Contract" with the fund manager Guofeng Xinghua and the fund custodian Guangfa Bank Co., Ltd. Beijing Branch.

The contract stipulates that Guofeng Xinghua will initiate the establishment of Guofeng Xinghua Honghu Zhiyuan Phase III Private Securities Investment Fund No. 1 (tentative name), with a fund establishment scale of 22.5 billion yuan. NCI will invest 11.25 billion yuan to subscribe for private fund shares.

Thus, backed by two major listed insurance companies, the total investment scale of Honghu Fund's Phase III fund has reached 92.5 billion yuan.

"Investment" Details Exposed

With the announcement from NCI on July 4, further details regarding the investment have been revealed, mentioning:

"The scale of (Honghu Fund Phase III No. 1 Fund) is 22.5 billion yuan, and our company will invest 11.25 billion yuan to subscribe for private fund shares."

However, unlike the announcements related to the first two phases of Honghu Fund, the third phase not only includes the sequence number of No. 1 but also has a scale that is not a round number of 10 billion as in previous years. Industry insiders expect this may indicate that the investment targets for Honghu Fund Phase III may change, and it will no longer be solely funded by China Life and NCI in equal shares as in the first two phases.

According to sources close to the two insurance companies, Honghu Fund Phase III may include external investors, but the fund management will still be handled by the asset management teams dispatched by China Life and NCI.

Honghu Phase III Continues to Focus on Large-cap Blue-chip Stocks

According to information disclosed by China Life Asset Management, Honghu Fund Phase III will continue to:

"Invest in and hold long-term shares of large-cap blue-chip companies with good corporate governance, stable operations, relatively stable dividends, good stock liquidity, and strong dividend returns, further reducing the impact of short-term price fluctuations on the financial statements of insurance companies, and promoting the realization of long-term, stable, and sustainable investment returns."

Honghu Fund Phase III will consistently adhere to the principles and framework of market-oriented, rule-of-law, and "long money long investment," maintaining the long-term capital attributes of insurance funds.

China Life Asset Management previously stated: China Life Asset Management and related institutions will expedite the implementation of Honghu Fund Phase III to bring medium- and long-term funds into the market as soon as possible, firmly establishing themselves as "patient capital" in the capital market.

Invested Varieties May Have Floating Profits

According to previously disclosed information, Honghu Fund managed by Guofeng Xinghua has historically appeared in the list of major shareholders of three companies.

As of the end of the first quarter of this year, Honghu Fund held approximately 5.98 billion yuan in China Telecom, approximately 4.29 billion yuan in Yili Group, and approximately 2.30 billion yuan in Shaanxi Coal and Chemical Industry.

From the trends of related stocks, China Telecom's stock price is currently near its high over the past year (as of the end of June 2025, adjusted price, same below), Yili Group is slightly above the median, while Shaanxi Coal is at a mid-low price over the past year Of course, these individual stocks belong to companies with outstanding operational capabilities and relatively high dividend levels in the industry. Honghu's focus on these companies aligns with the information they previously disclosed