Shinhan raises $330 mn for Carlyle’s bespoke revolving loan fund

Shinhan Alternative Investment Management Inc. (SAIM) has raised $330 million for the Carlyle Group’s newly launched revolving loan fund (CREV) targeting Korean insurance companies, in the biggest amount raised for a maiden fund in South Korea, according to market sources on Jan. 7.

For the first such strategy of Carlyle, the commitments from Korean investors – eight insurance companies -- is likely to represent over 60% of the first closing of the global commitment.

SAIM and Carlyle plan to raise an additional capital of up to $150 million in Korea for the strategy by the end of March this year.

The Korean insurance companies, committed to the new CREV, include Shinhan Life Insurance Co. Ltd., Kyobo Life Insurance Co. Ltd. and DB Insurance Co. Ltd.

The new CREV, dubbed as Clover, is a customized product for Korean investors.

Clover allows Korean investors to enjoy excess spread compared to products with a similar risk profile by implementing two investment strategies: (1) investing in high-credit liquid products such as US money market funds, US Treasuries, and at least AA-rated securitized loan products; and (2) committing to a pool of revolving credit facilities, targeting to generate around 7% gross return.

“It is very noteworthy that these Korean investors invested through the bespoke product (Clover) that was jointly designed by SAIM and Carlyle,” one of the sources told the Korean Investors.

It was the first time that Korean asset manager and global alternative manager jointly designed a bespoke investment product solely for Korean investors.

Clover drew strong attention from Korean investors, regarded as a creative and innovative capital-raising initiative.

The customized investment product is expected to address specific issues that Korean insurance companies face in conjunction with complex local regulations, and to facilitate the capital raising process in Korea where institutional investors in general remain reluctant to invest in maiden funds, according to the sources.

“This kind of advanced capital raising expertise through bespoke product development for Korean insurance companies or broader Korean investors is expected to be followed by global alternative managers in the future,” the source said.

One of the Carlyle’s global competitor recently launched a similarly designed product in Korea.

The fact that SAIM and Carlyle strategically designed new product only for Korean investors indicates that Korea has now become an important fundraising ground for global alternative managers, making a significant contribution to the international fund-raising of leading global alternative managers, according to the sources.

Led by the CEO Hee-Song Kim since 2017, SAIM is the fastest growing alternative asset manager in Korea with a series of differentiated product launches that yield excess returns.

SAIM has 6.8 trillion won ($5.8 billion) assets under management and commitments as of the end of December 2019.

By Jung-hwan Hwang

jung@hankyung.com