Korea Post seeks managers for global co-investment

The group, which had around KRW115 trillion ($108 billion) in postal savings and insurance assets under management as of last July, has asked for proposals from managers with a background in comingled fund products and separately managed accounts that include co-investment.

It wants to back 10-year funds with maximum management fees and carried interest of 1% and 15%, respectively, and a GP commitment of at least 1%. The target IRR is 7% and above. Managers must be registered with the Financial Services Commission (FSC) and market the funds through local distributors.

Korea Post will decide on the size of specific allocations following the evaluation period, which runs from the application deadline of March 16 to the end of the month.

Korean institutional investors are increasing their exposure to alternative assets because low policy interest rates have made fixed income less attractive. Although they are diversifying allocations across different private markets strategies, there is a general preference for credit because it offers stable cash flow and relatively low risk.

Korea Post Insurance, for example, has KRW50 trillion in assets, of which only 6% is deployed in alternatives and most of that in real estate. Hyun-Woo Jin, a deputy director in Korea Post’s alternative investment division, told the AVCJ Korea Forum last year that he was particularly interested in private credit, including senior secured loans and mezzanine funds.

The Public Officials Benefit Association (POBA), which has more than KRW10 trillion in assets and is targeting an alternatives allocation of 50%, has similar priorities. Private debt accounted for one-third of the $300 million POBA committed to seven global managers across five strategies in May of last year, but there was also $40 million for a co-investment product created by HarbourVest Partners.

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• Topics
• North Asia
• LPs
• Fundraising
• Korea Post
• South Korea
• Co-investment