(Yicai Global) Aug. 24 -- China Life Insurance, one of the country's major insurancefirms, will contribute USD581 million to cooperate with an investment company to jointlyset upafundtoinvest in the equity of major localstate-ownedenterprises,high-end equipment manufacturingandotheremerging sectors.

China Life will cooperate with another investment management company underit andShandong Xindongneng Fund Managementwhich is backed bythe government of China's easternShandong provinceto set up a limited partnership equity investment fund of USD727 million,with atermofeight years.

China Life will invest USD581million and Xindongneng willcontributeUSD145 million. Both are limited partners. An investment management company under China Life willchip inUSD145,000 as general partner and executive partner, the announcement said. The parties plan to signtheirpartnership agreement by December 31 to officiallypooltheirequity investment fund.

Theywill participate in the mixed-ownership reformbyintroducing private capital into majorSOEs in Shandong province. They will join these enterprises'tobuy equityinhigh-end equipment manufacturingandlocal key sectors such as tourism, leisure, culture and modern finance, per the announcement.

Investment firmswill also take the form ofdebt-to-equity swaps, mergers and acquisitions, asset restructuring, pre-initial public offeringinvestments, andlisted companies' private placements,the announcement stated.

The above fund will help the company broaden its investment channelsininsurance funds and boostits growth intheprovinceand afford itthe opportunity to allocate high-quality local equityincooperation with thelocal government to achieve long-term stable returns,itadded.

Editor: Ben Armour