Korea police fund to invest $87 mn in blind funds

The Police Mutual Aid Association of South Korea will post a public notice of a request for proposals this week to commit 100 billion won ($87 million) to blind funds, investment banking sources said on June 20.

The savings fund is set to pick six asset managers and allocate 20 billion won to two private equity funds and two private debt funds, respectively, for a total of 80 billion won. Also, it will choose two venture capital firms to allot 10 billion won to each of them.

For investments in PEFs and VC firms, it will grant mandates only to domestic asset managers, but for PDF investments, it will open the door to foreign investment firms. Those funds, once selected, will be required to make capital calls whenever an actual investment occurs.

“Recently, there is a tendency among (Korean) institutions to put money in blind funds once a year or every two years,” said a local asset management company overseeing pension funds. “It is because they want to diversify risks such as the J-curve effect, while seeking high returns.”

The police savings fund will select asset managers, based on their track records and presentations.

By Daehoon Kim

Daepun@hankyung.com