KTCU seeks new GPs skilled in raising corporate value

Korean Teachers’ Credit Union (KTCU) will seek out general partners (GPs) that have expertise in corporate workouts, add-on investments and a deep understanding of the relevant industries to raise the corporate value, Lee Chul Ho, head of the overseas corporate finance team at KTCU, said on Wednesday at an LP panel session during ASK 2021.

“One of our main concerns are overrated corporations, which are common in private markets. To adjust the investment risks, GPs' role will be much more important than before. We hope more GPs will contact us with an established plan at least six months before fundraising and closely communicate with us afterward,” he noted.

Besides GP issues, Lee said KTCU plans to increase private debt in response to overvaluation. The pension fund will also increase investment ticket size and be very selective in setting up funds in response to high market multiples.

Lee noted two big issues for KTCU during the ongoing pandemic and the first stages of its recovery this year. ”The biggest difficulty was in-person due diligence issues, particularly when a new GP is involved. Also, we experienced some challenges in fund management as we got a series of capital calls for infrastructure and real estate assets in line with increased investment."

KTCU kept its focus on investment in North America this year. It also invested in buyout funds including co-investment as the pension fund saw great opportunities in buyout funds that can discover corporations properly responding to industry changes and executing corporate workouts.

The pension fund’s assets under management (AUM) have reached 39 trillion won ($33.3 billion). Its alternative assets account for 59% of the assets. KTCU’s private debt and private equity assets take a combined 20%, aiming at a 4.5% of internal rate of return.

Write to Jun-Ho Cha at chacha@hankyung.com
Jihyun Kim edited this article.