Korea scientists fund to put €25 mn into Europe infrastructure-investing FoF

A South Korean asset management firm is raising a €100 million ($110 million) fund to invest in the Pan-European Infrastructure Fund (PEIF) II of a Deutsche Bank’s unit, and the Korea Scientists and Engineers Mutual-aid Association (SEMA) will commit €25 million to the fund of fund.

Deutsche Asset & Wealth Management is in the process of raising €2 billion for PEIF II, a similar amount that its prior fund PEIF I had attracted in 2007, according to investment banking sources on Oct. 19. The new fund will invest in core infrastructure in Europe, including water treatment, communication, transportation and power facilities, and target a 12% annual return.

Seoul-based Kiwoom Asset Management Co. Ltd. will launch the €100 million FoF for PEIF II, as demand for offshore infrastructure is rising on expectations for double-digit returns and steady cash flows.

After PEIF I delivered a 13% annual return, interest in the Deutsche Asset’s infrastructure fund soared, prompting the asset manager to raise the second fund.

SEMA’s Chief Investment Officer Du Yeong Jeong said in an interview with the Korea Economic Daily in June that the association was looking at Europe’s value-add property, and renewable energy projects in Europe.

SEMA, which oversees $3.4 billion in assets, had also committed about 50 billion won ($45 million) to the EQT Infrastructure III Fund managed by Sweden-based EQT Partners. The fund is expected to generate an annual return of 8%.

Separately, the Public Officials Benefit Association recently committed 50 billion won to a North America-focused infrastructure fund managed by Ares EIF, a U.S. investment firm.

By Hyunjin Lee

apple@hankyung.com