Carlyle raises $600 mn for infra credit fund with top Korean banking groups

The Carlyle Group has raised $600 million for an infrastructure credit fund in South Korea jointly with two domestic financial services firms to lend to infrastructure projects such as roads, harbors and railways in developed countries, according to investment banking sources on July 13.

The fund, dubbed Shinhan-Carlyle Infra Credit I, set a target return of 6-8% per annum. It was customized to meet the demand from Korean insurance companies for high-yielding investments ahead of mark-to-market accounting in 2023 that should raise their burden of capital costs, the sources said, without elaborating.

Shinhan Alternative Investment Management Inc. was involved in designing the credit fund. Hana Financial Investment Co. Ltd., as the underwriter, is responsible for selling it down to insurance firms.

It was first reported by the Maeil Business Newspaper.

The credit fund followed Carlyle’s revolving loan fund that raised $330 million from Korean insurers earlier this year.

The revolving loan fund, raised via Shinhan Alternative, was also a bespoke product for Korean investors and the first investment vehicle jointly designed by a Korean asset manager and a global alternative investment firm targeting Korean investors.

Carlyle, with $217 billion in assets under management, has been beefing up investment cooperation with Korean financial services firms, diversifying portfolios into real estate and infrastructure.

It has recently agreed with KB Financial Group, a leading Korean banking group, to form a strategic alliance to enhance global and domestic investment activities. As part of the agreement, it will likely invest $415 million worth of exchangeable bonds and shares in KB Financial.

Meanwhile, Shinhan Financial Group and Hana Financial Group, the two banking giants in Korea, signed a preliminary agreement in May to cooperate in global businesses, which included their participation in a pool of the $1 billion syndicated loan for African Export-Import Bank in June.

Write to Hyun-il Lee at hiuneal@hankyung.com


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