AMP Capital’s Australia infrastructure fund tipped to raise $76 mn from Korea

An infrastructure fund managed by Australia-based AMP Capital is expected to attract about 87 billion won ($76 million) from South Korean investors, including 40 billion won from the Public Officials Benefit Association (POBA).

POBA, a $8 billion retirement fund for South Korean government employees, decided on Feb. 10 to commit 40 billion won to the blind-pool fund, POBA and investment banking sources said on Feb. 12.

Korea Scientists and Engineers Mutual-aid Association and a deposit insurance agency of the National Agricultural Cooperative Federation are also contemplating investing in the fund.

The open-ended infrastructure fund has already started operation and runs 400 billion won in assets. It targets public service facilities in Australia, including schools, hospitals, correctional institutions and water treatment facilities, owned by the private sector and leased to municipal governments.

The fund is expected to deliver an annual return of 6.5% during a 12-year duration.

Mirae Asset Global Investments Co. Ltd., acting as a domestic sales agency, aims to raise a total of 87 billion won from Korean institutions for the fund.

South Korean institutional investors, keen to diversify away from crowded, low-yielding markets, are piling into Australian real estate and infrastructure in the hunt for steady income streams.

Last year, POBA committed 60 million Australian dollars to a Macquarie infrastructure fund investing in Australian state assets for an expected return of 8% a year.

AMP Capital manages A$160 billion in funds and has strong track records in real estate and infrastructure.

By Daehun Kim

daepun@hankyung.com